Alan Miller, CIO at SCM Direct Wealth Management, said fee disclosure was “vital” for consumers but added: “The fact that the FCA feels it has to state there will be an increased duty to act in the best interests of investors and use SMR to bring individual focus and accountability shows how fundamental the dereliction of duty has been in the asset management industry.”
Other measures would tackle a trail commission, a hangover from the pre-RDR era which still applies to some investments made before 2012 and one which asset managers admitted to the regulator was a “barrier” to investors getting good value for money.
Out of 30 firms, 21 asset managers paid out £1.4bn in commission to advisers in 2015 alone.
The FCA also wants to make it easier for managers to move investors into cheaper share classes without needing express permission and intends to crackdown on managers benefitting from box profits.
While it accepted it was not a widespread practice, the FCA revealed a new requirement that managers pass risk-free box profits back to the fund and disclose their policy and how any profits will be treated in the prospectus.
The FCA consultation is open for comments until 28 September.