 that, regardless of inputs from their groups or other parties, they are solely responsible under COLL6.6.20R for completing Assessments of Value and concluding whether fees are justified.' The findings of the review, which took place between November 2022 and March 2023, will make for disappointing reading for investors, who have long been told that improved transparency and competition from cheaper passive funds will drive down active fund managers' fees. The FCA said some fund managers had cut their fees by a couple of percentage points where 'poor value' was identified, while others had moved investors in outdated, pre-Retail Distribution Review share classes into 'clean' classes with no trail commission. The regulator also said many companies had improved their processes for assessing whether a fund provides good value for money. Yet despite these improvements, many are choosing to 'ignore' new evidence that suggest their current fees are unjustifiably high. The new Consumer Duty, introduced){kind=link}
Stock pickers’ charges can seriously erode investment returns over time
The Financial Conduct Authority (FCA) has slammed fund managers for refusing to cut fees despite their poor performance.
The financial regulator said that many firms were still putting profitability first and ignoring evidence suggesting they should cut their fees, despite improving their value assessments.
None of the firms assessed by the FCA in its fund manager review had reduced fees following poor performance.
Worryingly, some of the companies’ boards implied that cutting fees was outside their control.