Wed, 28/06/2017 - 11:09
Gina & Alan Miller of SCM direct comment on the findings of the FCA’s final report on investment industry fees…
Whilst the FCA is finally pursuing a pro-consumer agenda it is disappointing that they still appear to be dragging their feet on some key aspects. The UK investment industry has been ripping off the consumer for decades and it is time for the UK regulator to act now rather than have further consultations with the industry and its shoddy trade bodies.
Consistent and standardised fee disclosure in a single number is vital for ordinary investors to make better choices. This should be mandated by the FCA to retail and institutional investors alike rather than just institutional investors or it is inevitable that differing formats by investment groups will make easy comparisons impossible. Whilst the FCA agrees with our long-held view that forthcoming legislation requires firms to provide aggregated and on-going information on all costs, there is no timeline to when the ‘future remedies’ to allow investors to ‘understand the role of the prominence and formatting of charges information’ will actually take place. Furthermore the FCA is only ‘considering’ the wider use of pounds and pence disclosure on other information sources.
In terms of the numerous consultations and working groups, some appear unnecessary and rules should be brought in straight away to protect savers. More consultations opens the FCA to more self-interested lobbying from the industry and its anti-consumer trade bodies. However, we welcome the announcement of an investigation into the UK platform market as many retail investors and advisers have substantial sums invested via platforms where in some cases the fees appear excessive. We also welcome the decision to ignore the attempts by pension consultants to avoid a formal investigation.
The fact that the FCA feels it has to state there will be an increased 'duty on fund managers to act in the best interests of investors and use the Senior Managers Regime to bring individual focus and accountability to this' shows how fundamental the dereliction of duty has been in the asset management industry.