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Asset management market study

Welcome to our hot topic page which sets out information on the current status of the FCA’s Asset Management Market Study. We have included links on this page to our briefings and relevant FCA papers. For the very latest information and advice on the market study, please feel free to contact one of our team.

How Eversheds Sutherland can help

Our in depth understanding of the sector, combined with our competition team’s extensive experience in responding to market studies and market investigations, means that we are very well placed to guide you through this process. As a first step, we can help you to analyse the impact of the market study on  your business as well as helping you to make your representations to and engage effectively with the Financial Conduct Authority (FCA).

About the Asset management market study

The FCA published its terms of reference (TOR) for its competition market study into the asset management industry on 18 November 2015. This is the first time that the FCA has considered competition for the asset management market.

The TOR marked the start of a year-long process during which the FCA have held various roundtables, bilateral meetings and send out requests for data and information about asset managers’ businesses.

The TOR set out three main questions for the market study:

  • How do asset managers compete to deliver value?
  • Are asset managers willing and able to control costs and quality along the value chain?
  • How do investment consultants affect competition for institutional asset management?

The market study followed the Wholesale sector competition review 2014-15 but was broadened to cover retail as well as institutional investors.

Current status

The FCA published its long-awaited interim report in the asset management market study on Friday 18 November 2016. Originally due to be published in Summer 2016, the interim report has found that there is weak price competition in a number of areas of the asset management industry.  It has also proposed a number of potentially significant and interventionist remedies which address some of the investor protection issues which arose from the study.

The FCA is now consulting on these proposals.  Responses must be submitted by 20 February 2017.

What should asset managers do?

 Asset managers will need to establish quickly whether or not the findings and proposed remedies impact their businesses.

  • It is imperative that any firm affected by the proposals responds to the FCA’s consultation on the interim findings, since this will be the last opportunity to do so before they are finalised.
  • It is advisable to make representations if your firm is affected by the findings, even if it did not receive a request for information from the FCA and / or has not been involved in the process to date, or only to a limited extent.
  • Managers must make representations to ensure the ultimate findings of the report accurately represent the true state of competition in the asset management market.
  • Managers should also include the firm’s assessment of proposed remedies, whether they are proportionate and likely to achieve the FCA’s stated aims.
  • Wherever possible, managers should support representations on findings and remedies with compelling evidence.
  • Some managers may wish to request a meeting with the FCA to discuss their reaction to the interim report. 

Industry consultation: