The FCA’s Asset Management Market Study

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • The FCA’s Asset Management Market Study
  • Background to the study
  • What were the key findings of the survey?
  • What were the remedies proposed in the FCA’s final report?
  • Remedies to protect investors less able to find better value
  • Strengthening the duty of AFMs to act in investors’ best interests
  • Independent directors
  • SM&CR
  • Share classes
  • Trail commission
  • More...

The FCA’s Asset Management Market Study

Background to the study

The FCA published the terms of reference for its Asset Management Market Study (AMMS) on 18 November 2015. In the terms of reference, the FCA highlighted the large amount of assets under management in the UK (around £6.6trn in 2014–15) and the important role of asset managers in bringing together potential investors and companies or governments needing capital for investment, expansion or funding their ongoing operations. The FCA also flagged that, given the significant size of the asset management sector and its impact on consumers whether direct (eg through pension funds) or indirect (through insurance premiums), it is essential that competition works effectively for these services.

On that basis, the FCA announced in its 2015/16 business plan, its intention to undertake a market study into asset management. This followed feedback received as part of the FCA’s wholesale sector competition review, which raised a number of questions about the asset management value chain including:

  1. whether investors find it difficult to monitor asset managers and ensure they are getting value for money

  2. the role of investment consultants and whether potential conflicts of interest arise from the provision of both advice and asset management services, and

  3. whether asset managers have the incentive and ability to effectively control costs incurred on behalf of investors along the asset management value chain

The AMMS

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