UK: FCA to scrutinise competition in £6.6 trillion asset management industry

The UK financial watchdog has said it “may intervene” in the asset management industry if a new report finds there is not enough competition in the sector.

The Financial Conduct Authority said it could take action “through rule-making, introducing firm specific remedies or enforcement action, publishing general guidance or proposing enhanced industry self-regulation” if it finds that a lack of competition means investors aren’t getting value for money on the services they purchase from asset management firms in the UK.

“Given the size of the market and the long-term nature of investments, even a small improvement in the effectiveness of competition could be of substantial benefit for investors,” the regulator said.

The City watchdog is launching a market study into asset managers, scrutinising all areas of competition in the sector including how asset managers compete to deliver value and whether they are motivated to control costs for both ordinary retail investors and big institutional clients.

In addition, the FCA will look at whether there are any barriers to innovation or technological advances in the industry. Christopher Woolard, director of strategy and competition at the FCA, said: “Given the significant role they play in the economy, it is essential that competition works effectively for these services.

Full content: The Scotsman

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