Asset management market study

In November 2015, we published the Terms of Reference for our asset management market study. The aim of the study will be to understand whether competition is working effectively to enable investors to get value for money when purchasing asset management services.

Why are we carrying out this market study?

We announced our intention to undertake a market study into asset management in our 2015/16 Business Plan, following feedback received as part of our wholesale sector competition review, which raised a number of questions about competition along the asset management value chain.

Given the size of the market and the long-term nature of investments even a small improvement in the effectiveness of competition could be of substantial benefit for investors.

As part of our market study we will seek to understand:

  • how asset managers compete to deliver value
  • whether asset managers are willing and able to control costs and quality along the value chain
  • how investment consultants affect competition for institutional asset management

Whilst these questions arose from the wholesale sector competition review, a number of these questions are equally relevant to retail investors.

Across all three topics we are interested in understanding whether there are any barriers to innovation or technological advances which may be preventing new ways of doing business that could benefit investors.

Terms of Reference [PDF]

What will the market study cover?

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.

Next steps

Throughout our study, we are keen to hear from all market participants about their experiences. We will host a number of roundtable and/or bilateral meetings with stakeholders. We will shortly also be approaching market participants to discuss the information and data necessary to enable us to assess the issues we have set out above.

If you wish to make any submissions on the topics raised in the terms of reference, please send them to assetmanagementmarketstudy@fca.org.uk by 18 December 2015.

Interim report

We intend to publish the interim report in Q4 2016 (rather than summer 2016 as stated in our Business Plan) and a final report in early 2017.

Our interim report will set out those areas which we consider raise concerns and those in which we have found few or no problems. We are currently finalising the interim report of our market study into asset management.

If we conclude that competition is not working well, we may intervene to promote effective competition. We can do this through rule-making, introducing firm specific remedies or enforcement action, publishing general guidance or proposing enhanced industry self-regulation.