FCA review urges move to ongoing fund charges

The Financial Conduct Authority (FCA) has urged asset managers to move away from using the annual management charge (AMC) as their headline cost, instead pushing for a focus on the ongoing charges figure (OCF).

Following a review of charges across the sector, the regulator said there are two main messages from its work. Firstly, that having both an AMC and an ongoing charge across marketing material may "confuse" investors. Secondly, that using the OCF consistently in all marketing material for UCITS funds is likely to help investors understand and compare charges. The regulator wants retail investors to be able to make meaningful comparisons between products when deciding where to invest, and therefore wants to see fund groups presenting charges "clearly and consistently". Accordingly...