The Financial Conduct Authority (FCA) earlier has today published the final findings of its asset management market study and announced the package of remedies it will take forward to address the concerns identified in its interim report into the sector.
Here’s what Ian Peacock, Head of UK and Ireland at IG Group Holdings plc (LON:IGG), has to say about it:
We welcome the FCA’s final report of its Asset Management Market Study and its call for more transparency on fees and benchmarks. These changes will only lead to more positive investment outcomes for consumers. Hidden charges have been materially eating into investment returns for years. Being upfront about charges, allowing investors to see their total cost of ownership, will inevitably lead to fee savings overall, meaning a greater portion of an investor’s returns can be reinvested, generating further earnings.
Fee transparency in the wealth management industry has come under increased scrutiny in recent years, but, while there has been some downward pressure on fees, the sector has been slow to change. We have long held the view that many wealth management providers fall short when it comes to fee transparency, leaving investors in the dark about the true cost of investing and the impact it will have on their returns. The changes from this review will hopefully mean that investors are finally no longer blindsided by fees.
In April this year we launched IG Smart Portfolios, a range of risk managed investment portfolios, with the aim of putting true transparency at the heart of direct customer choice. There are no set-up, dealing, rebalancing or exit fees and investors get complete transparency on total costs of the portfolios, with no hidden charges.
FCA Market Study into Investment Platforms
We welcome the upcoming market study into investment platforms. IG’s Share Dealing offering has a standard trading charge from just £5 for UK shares, a focus on promoting low-cost ETFs and does not charge investors platform, custody or transfer charges. We believe that a low cost online service should not compromise at all on customer service, resulting in greater consumer control and clarity.
There are three main areas that IG will call for the Investment Platforms Market Study to focus on:
- Improving the clarity for consumers on the fees charged by Investment Platforms
– Standardised costs
– A clamp down on hidden fees and platforms that do not disclose all their fees
- An examination of the various online comparison services on Investment Platforms and their true independence
- Removing transferring out fees so consumer do not suffer financially if they want to change Investment Platforms just as they would not if they switched energy or mobile phone providers.