Occasional Paper No. 32: Now you see it: drawing attention to charges in the asset management industry

As part of the Asset Management Market Study, the FCA wanted to understand the impact of different ways of presenting charges on investors’ decision-making and their understanding and awareness of charges.

Occasional Paper No. 32 (PDF)

London Economics Technical Appendix (PDF)


The UK’s asset management industry is the second largest in the world and manages around £8.1 trillion of assets, which includes over £1 trillion in retail investment products. The FCA’s Asset Management Market Study found that some charges might not always be visible to retail investors and, even when they were, investors might not pay sufficient attention to charges or understand their impact on investment returns.

We therefore carried out an experiment on a simulated online platform with over one thousand non-advised investors to test the impact of four ways of presenting charges.

We found that all of the measures we tested increased the proportion of investors choosing a cheaper fund and some of the effects were sizable. In addition, the increased focus on charges did not seem to reduce the importance that participants placed on other fund characteristics such as performance or risk. A warning message appeared to improve decision-making, particularly when it was coupled with a chart showing the impact of charges or a screen providing a summary of charges just before an investor purchased a fund. The information which was most impactful was also prominently positioned on pages which all investors had to view.

These results highlight that simply providing consumers with information does not guarantee that they will use it in their decision-making. However, clearly presenting understandable and engaging information in a prominent way can increase the effectiveness of disclosures.


Lucy Hayes, William Lee and Anish Thakrar

Lucy Hayes works in the Behavioural Economics and Data Science Unit and Anish Thakrar and William Lee work in the Competition & Economics Division of the Financial Conduct Authority.


Occasional Papers contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that Occasional Papers contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.