FCA to investigate fund management ‘research’ payments

The FCA is launching an investigation into the way asset management firms use client fees to pay for research and other opaque services.

The regulator said it was concerned that “some asset managers are pushing the definition of ‘research’ by using client commissions to cover non-eligible costs and services”.

At a speech at the 2013 FCA Asset Management Conference today, FCA chief executive Martin Wheatley (pictured) outlined the steps the regulator will take to tackle the problem.

Article continues after advert

It will launch a consultation paper in November to “clarify rules on research, including guidance around corporate access” and will conduct a thematic review looking at “conflicts of interest within asset management”.

It comes after Investment Adviser’s sister title FTfm earlier this year revealed how some brokers and consultants charged fund managers “up to $20,000 an hour” to meet chief executives - costs which were subsequently passed on to investors.

IMA chief executive Daniel Godfrey has come out in support of the regulator’s plan. He said the IMA has been conducting a “significant review” of this area itself and expects to publish its results in the new year.