Finance heavyweight Martin Gilbert has welcomed a damning new report from the Financial Conduct Authority (FCA) saying there is weak price competition in the UK asset management market.
Aberdeen Asset Management’s multimillionaire co-founder and chief executive added the watchdog’s interim findings gave “focus and a sense of urgency” for tackling key issues impacting on customers.
Mr Gilbert said: “There is a need for increased transparency in relation to the services provided, the costs of such and also for ensuring value for money.
“Asset managers play a vital role in helping investors achieve their financial goals and the FCA’s proposals will help deliver this.
“We look forward to working with the regulator and the industry to ensure all investors, large or small, receive the best possible service.
“The FCA’s suggested remedies will also help to strengthen confidence and competitiveness in the UK asset management industry, making it more attractive on the global stage by leading the way in best practice.”
The FCA outlined a major shake-up for the UK’s fund management industry, the second largest in the world, to help savers achieve a good return in an era of low-interest rates.
In its interim inquiry report, the watchdog said savers were being stung by higher charges because price competition was weak.
And it recommended investors should be offered an “all-in fee” so they can easily see the amount taken in charges.
FCA chief executive Andrew Bailey added: “In today’s world of persistently low interest rates, it is vital that we do everything possible to enable people to accumulate and earn a return on their savings which can meet their lifetime needs.
“To achieve this, we need to ensure that competition in asset management works effectively to minimise the cost of investment.
“We want to see greater transparency, so that investors can be clear about what they are paying and the impact charges have on their returns.
“Low interest rates are necessary for the economy but we have to do everything else we can to ease the burden on savers.”
The report is being put out for consultation, with final conclusions due to be published next year.
Mike Walters, head of investment management regulation at professional services giant KPMG UK, said the report represented a “fundamental challenge” to the industry.
Chase de Vere financial planner Patrick Connolly said: “The investment management industry needs to lower their charges, provide greater transparency and produce more consistent and better performance; there is no reason why they cannot address the issues of charges and transparency now.”
