Watchdog FCA tells asset managers to review cost disclosures
LONDON (Reuters) – Asset managers are calculating transaction costs for products inconsistently and sometimes inaccurately, raising the risk of confusing investors, Britain’s Financial Conduct Authority (FCA) said on Thursday.
The watchdog is looking at how to improve “value for money” for investors putting money into funds, such as by making it easier to compare products and clarity on costs and fees.
“Asset managers should review their cost disclosures to ensure that they are clear, fair and not misleading,” the FCA said in a statement.
It follows a review that began last year into the impact of new European Union product disclosure rules, known as PRIIPs, and into a sweeping revision of EU securities rules, known as MiFID II.
“While awareness of the rules appears good, we found that firms take inconsistent approaches, risking confusion for customers, who may be misled about how much they are being charged,” FCA Chief Executive Andrew Bailey said in a statement.
“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.”
But he said public claims that asset managers were deliberately not complying with the new rules had not been supported by the evidence.
Wealth managers and retail platforms that sell products were also interpreting the new disclosure rules inconsistently in some cases, making it hard for investors to compare products properly, the FCA said.
(Reporting by Huw Jones; Editing by Mark Potter and Edmund Blair)