Uncertainty over FCA asset management study

The FCA has said no measures have been taken off the table as it debates possible conclusions to its asset management market study. This is despite reports that the watchdog had ruled out imposing a cap on retail fund management charges.

A spokesperson for the FCA told Money Management’s sister title Financial Adviser that the regulator was still considering a range of outcomes ahead of the publication of interim findings in November. Newspaper reports had previously suggested the regulator was steering away from capping fees.

A lack of clarity over the FCA’s intentions will add to the fund industry’s discontent with the study, which has been underway since the start of 2016. Interim findings have already been delayed once, having initially been scheduled to be published this summer.

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 “If you look at the study’s terms of reference, there are lots of things you could look at back in November 2015 [when the terms were first published] that you might have got concerned about,” said Haley Tam, ananalyst at Citigroup.

 “We don’t know if the FCA has put more emphasis on the concerns about competitiveness and institutional mandates, or on why retail fees are so much higher than institutional fees. The fact that it has been 11 months is [also] frustrating,” 

Ms Tam added the fee cap –a measure she suggested would be uncharacteristic for the regulator – is the least of the industry’s worries. 

“At this stage, the FCA asset management market study is just that – a market study. I would talk about uncertainty in the [case] of Mifid II being a real problem; we’ve got the rules but we don’t really know how the companies are going to implement them,” she said. 

Fee caps have been a growing feature of financial policy in recent years, although the most high-profile example, the charging cap on auto-enrolment pension charges, was introduced by the government rather than the FCA.