FCA throws cold water on IA input ambitions
PLSA Investment Conference 2017: The Financial Conduct Authority’s director of strategy and competition Christopher Woolard has said he does not want to be bound by industry initiatives in making new rules for asset managers.
Woolard’s statement comes after the Investment Association said it will consult publicly through the spring of this year on proposals for more transparency.
We’re never going to get perfection, but in a short space of time we’ve travelled further than in the many years before that
Jonathan Lipkin, the IA’s director of public policy, said the association is pressing ahead with its work on how to achieve a more transparent investment management framework despite the FCA only publishing the final report of its asset management market study in the summer.
Speaking at the Pensions and Lifetime Savings Association’s Investment Conference 2017, Lipkin said this would allow asset managers to begin providing core data in line with FCA rules on cost disclosure coming into force.
The IA has decided to move now, he said, “because we know enough about the direction of travel” of the FCA’s work and because it was time for the investment management industry to show it is “not hiding”.
Lipkin said the association’s ambition is “for the IA code to be incorporated into the FCA [Conduct of Business Sourcebook] rules”. But speaking at the same conference, Woolard made it clear the FCA would not feel bound by any suggestions from the industry.
An industry-led solution, he said, “is a really good thing”, but added that what was needed ultimately was something that meets the needs identified in the FCA’s report, “the needs of the customers in the space”.
He said that all too often in the past, regulators, including the FCA, had been stuck with whatever the industry proposed after seeking input.
Woolard said he wanted to make sure the FCA will not be in that situation this time.
FCA lights the way on transparency
‘A big flashing neon light’ marking the direction of travel on transparency has been lit by the Financial Conduct Authority with its proposal to make asset managers disclose transaction costs to defined contribution schemes.
Consumer panel positive about transparency efforts
Teresa Fritz, member of the Financial Services Consumer Panel, said the experience of being a member of the IA’s advisory board on cost disclosure had been a positive one.
Fritz also said she was hopeful greater transparency on costs will be achieved, noting she was “more heartened by the asset management market review because it does mention the single charge”.
She emphasised that the all-in fee was necessary to make charges more comparable. “If you don’t have one single formula to say that one is better than that one, it’s never going to happen,” she said.
“We’re never going to get perfection,” she added, “but in a short space of time we’ve travelled further than in the many years before that”.