Asset management firms ‘inconsistent’ with cost disclosure, City watchdog warns
Asset management firms are inconsistent with costs and charges disclosure compliance, the city watchdog warned today.
The Financial Conduct Authority (FCA) said asset managers must ensure they are “clear, fair and not misleading” in order to avoid confusion over costs for customers.
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The FCA's investigation into disclosure following the introduction of new regulations under Mifid II and Priips, found that asset managers generally do not disclose all associated costs and charges, and that inconsistencies between documents and websites can be confusing for customers.
Retail intermediaries such as wealth managers, direct-to-consumer platforms and advisory firms were found to be aware of the rules but the watchdog also discovered that they were implemented inconsistently among firms.
Some companies told the FCA that they found it difficult to collect the data needed from other firms to enable disclosure of all costs.
FCA chief executive Andrew Bailey said: “We are aware that many firms are finding aspects of the calculations difficult or are making inaccurate calculations. We will work with firms to help them ensure their reporting is accurate.
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“We are aware of public claims of an intent deliberately not to comply with the new rules. While we have found some areas of non-compliance with the new rules the claims which have been made regarding this are not supported by the evidence in important respects.”
The warning comes after the FCA launched a study into fund disclosure earlier this month, which urged asset management firms to provide greater clarity for investors.