The Financial Conduct Authority have cracked down on the way the asset management sector charges its customers, in a bid to make the industry more transparent.
The new regulations will aim to promote a clearer pricing structure, with each firm declaring a complete annual fee, rather than the current mix of different charges.
The FCA’s investigation found that firms in the sector had an average profit margin of 36 percent. Yet despite “sustained, high profits” for these firms, there was weak price competition and no link between higher fees and better performance.
“In the current low-interest environment, it is vital we help people earn a return on their savings. We need a competitive sector, attracting investment into the United Kingdom which also works well for the people who rely on it for their financial well-being,” said Andrew Bailey, FCA chief executive.
“We have put together a comprehensive package of reforms that will make competition work better and help both retail and institutional investors to make their money work well for them.”
