FCA asset management market study

The impact of charges on active fund management performance is brought into stark contrast by the FCA market study.
18 November 2016

Whilst some progress is being made towards greater transparency in the fund management market clearly there is much more that can be done and there are some interesting proposals in the report to consider. 

Ryan Hughes, head of fund selection at AJ Bell, comments:

“We welcome moves to make fund management more transparent but one of the most interesting conclusions from the report is that the unbundling of fund charges since the Retail Distribution Review has had virtually no downward impact on active fund charges.  The RDR was a success in many areas but there was an assumption that it would reduce the cost of active fund management and it didn’t achieve that.

“It is important therefore that the changes being considered now are rigorously challenged and tested to ensure they will actually have their desired effect.  In the meantime, for investors this report highlights the importance of carrying out detailed research and choosing the right fund, whether active or passive.  There are lots of great funds out there but if you choose the wrong one, the impact of charges on performance can be significant.”

The market study can be found here: https://www.fca.org.uk/publications/market-studies/asset-management-market-study 

Follow us: