FCA unveils plans for asset management competition study

The Financial Conduct Authority has unveiled its plans for a study on competition in the UK asset management industry.

The financial watchdog said its market study will focus on three areas: how asset managers compete to deliver value, whether they are motivated and able to control costs along the value chain and what effect investment consultants have on competition for institutional asset management.

In addition, the FCA will look at whether there are any barriers to innovation and/or technological advances in the industry.

Both retail and institutional investors will be considered.

Christopher Woolard, director of strategy and competition, said: “Asset managers provide an important economic function, bringing together those with money to invest and companies and governments that need capital. Given the significant role they play in the economy, it is essential that competition works effectively for these services.

“The UK is a world leader in asset management. Our market study aims to ensure that both retail and institutional investors can get value for money when purchasing these services – which we expect to further strengthen the UK’s position as a major centre for asset management.”

The FCA said it plans to publish interim findings in summer 2016 and a final report by early 2017.

The UK is Europe’s largest asset management market, with around £6.6trn invested. This includes around £2.1trn of pension fund investments, £1.2trn in retail investment products and £0.4trn in public sector and charity investments.

There is a further £1trn investment in insurance products and £1trn invested in non-mainstream asset management products – both of which will include pension fund investments.