FCA introduces requirement for fund managers to assess investment value

Written by Oliver Wade

05/04/2018

The FCA has published its final rules following a previous consultation, around a requirement for fund managers to make an annual assessment of value, as part of their duty to act in the best interests of investors.

There were multiple concerns addressed in the June 2017 final report of the asset management market study. As well as the requirement for fund managers to provide an annual assessment of value, they must also appoint a minimum of two independent directors to their board along with the introduction of a new prescribed responsibility under the Senior Managers and Certification Regime to bring “individual focus and accountability”.

Furthermore, technical guidelines will further be implemented to improve fairness around the way in which fund managers profit from investors buying and selling their funds, and facilitate the movement of investors into cheaper share class.

The FCA reported that these measures will deliver better protection for all investors, those who are actively engaged with their investments and those who do not follow it as closely.

FCA executive director of strategy and competition Christopher Woolard commented: “The investment choices open to people, and the decisions they make on how to invest, can have a profound impact on their financial health. They can also have consequences for their families, as well as society as a whole. That’s why it is important the asset management industry, which looks after the savings of millions of investors, is working as well as possible. But our market study found evidence of weak price competition in a number of areas.

“Today’s announcements are an important part of a package of measures that, combined, aim to achieve a fair, transparent, open and accountable market.”

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