Summary and analysis of the FCA Asset Management Market Study Final Report

In its final report on the Asset Management Market Study, the FCA has stuck to its guns on its interim findings around governance, lack of adequate price competition, fund performance, and clarity of costs and charges. But the report does not bring this reflective period to an end, instead the package of remedies entails a substantial “to do” list for the regulator with further consultations published and expected, and new areas to be considered for regulation. So to an extent the industry remains in a position of wait and see.

In its remedies, FCA has piggybacked off current and forthcoming regulatory frameworks: SMCR to strengthen the duty on fund managers to act in the best interests of their investors; PRIIPS and MiFID II with their heightened investor protector disclosure regimes. It continues to push for a single all-in fee to investors on which it will consult later in the year, and intends future rules to require fund managers to clarify investment objectives, to explain of use of benchmarks and to improve disclosures which use past performance as an indicator. Investment consultants face the dual threats of becoming regulated by the FCA and a CMA market investigation reference in September; in addition, a further FCA market study, this time into competition in the investment platforms market, has been announced.

If you have any questions please get in touch with any of the experts listed in the summary or any of your usual Linklaters contacts.