The first round of the FCA’s ‘Assessment of Value’ regime is over and some firms have reduced fees on certain funds after deciding that value was not always given to the end customer. But what appears to be the regulator’s success on behalf of the consumer now has to be reflected upon, because the quality of methodologies and reporting by asset managers is greatly varied.
As our article shows, the FCA’s decision to offer pointers rather than cast-iron templates for how fund boards assess value in fund ranges has led to differences in approach that have impacted how firms report performance, fees, and charges.
Performance measures and cost indicators can be conflicted. Added to this is sometimes confusing jargon. It is still difficult for investors to assess value, therefore, albeit there is evidence that many firms have invested heavily in the process and take it seriously.
The value regime as it evolves will call for fund boards – particularly independent non-executive directors who are chiefly steering the initiative at the corporate level – to compare not just their funds’ performance and charges with peer groups, but their whole strategy for scrutinising value and delivering the objectives of the Assessment of Value regime.
Nick Fitzpatrick, Group Editor, Funds Europe
© 2020 funds europe
