Regulatory experts warn FCA Study has 'severe implications' for asset managers

Could reduce competition

UK asset managers face a number of medium- to long-term structural headwinds as the Financial Conduct Authority attempts to tackle "weak price competition" across the sector, with the future of "large, pedestrian, averagely-performing" groups particularly at risk, according to industry commentators.

While fund groups may have been relieved certain proposals like a cap on fund fees were dismissed in the interim report of the watchdog's eagerly-awaited Asset Management Market Study, regulatory experts say many of the FCA's wide-reaching proposals deliver a "wholesale challenge" to asset managers, and could speed up the pace of fund and provider consolidation. Although the FCA's final report will not be published until next year, it outlined a number of proposed solutions to improve competition, including: a strengthened duty on asset managers to act in the best interest of investors a...