$10trln asset management sector probed

The UK’s Financial Conduct Authority (FCA) is to investigate whether Britain’s $10 trillion (£6.6 trillion) asset management industry delivers value for money for investors.

The FCA said if it found that competition was not working well, it could intervene to promote effective competition.

The regulator said it could do this through rule-making or enforcement action or merely publishing guidance or proposing improved industry self-regulation.

“The aim of this study is to understand whether competition is working effectively to enable both institutional and retail investors to get value for money when purchasing asset management services,” said the FCA.

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

“Asset managers provide an important economic function, bringing together those with money to invest and companies and governments that need capital,” said Christopher Woolard, director of strategy and competition at the FCA.

“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.”