Regulator unveils plans to shake up the fund management sector

MARGARET TAYLOR

Aberdeen Asset Management chief executive Martin Gilbert said the report gives “clear guidance” on how the FCA plans to regulate the sector.

taking account of investors’ long-term best interests,” Mr McPhail said.

However, The People’s Trust founder Daniel Godfrey disagreed, saying that the FCA “has delivered a report which spares [investment managers] the harshest potential remedies flagged in their interim report last November”.

That highly critical report, which found that retail investors were faced with poor value for money and weak competition from providers, suggested the regulator was considering forcing fund managers to provide more clarity on fees and performance objectives.

Mr Godfrey, who was previously chief executive of the Investment Association but

left in 2015 after falling out with the industry over what he saw as asset managers’ unwillingness to be transparent on fees, said investment managers would be “relieved” by the FCA’s actual recommendations.

Justin Modray, director at advisory business Candid Financial Advice, agreed, saying the regulator’s final report is a “damp squib”.

“Last year’s interim report was one of the FCA’s finest pieces of work, clearly detailing the ways in which the fund management industry is failing its customers,” he said.

“Unfortunately, extensive lobbying by fund managers since then appears to have

worked, because the FCA’s proposed remedies in [its final] report are a damp squib and unlikely to make a tangible difference to most investors.

“We remain concerned the FCA’s proposals will not fix three key issues hurting fund investors: price collusion, failing to pass on economies of scale and profiting from inflated admin expense claims.”

The FCA plans to implement its recommendations in stages with some areas, such as how to make fund objectives more useful, being put out to a working group for further input. The regulator also plans to undertake further consultation on how benchmarks should work. IT seemed fitting that a fund-raising event for the ICAS Foundation should involve guests being whisked around in classic transport.

Sir Brian Souter, president of the ICAS accountancy body and co-founder of Stagecoach, hosted a Steam Train Special in London recently, with guests enjoying a spin on vintage buses before a journey on the Belmond British Pullman.

The event raised £250,000 for the foundation, which supports the next generation of chartered accountants.