PIMFA comments on FCA report into the UK Asset Management Industry – 29th June 2017

PIMFA welcomes the drive for transparency and governance captured by the Financial Conduct Authority report into the UK’s asset management industry which is the product of their ongoing sector consultation with key industry stakeholders.

The UK’s asset management industry plays a vital role in helping individuals and families across the country to save and invest their assets; and as the trade association representing the UK’s Personal Investment Management & Financial Advice sector, we welcome any move to improve transparency and governance in the industry.

While we continue to work with the regulator and government to deliver an optimal working environment for our member firms and their end clients, PIMFA would caution against the introduction of any measures that may have ‘unintended consequences’.

Recent industry studies highlight the challenges the industry faces, including among others profitability in the adviser market. As the latest APFA study into the financial advice market shows, retained profit in 2016 was less than 3% of revenue, with retained profit for financial advice firms of around £127 million. Meanwhile, commissions received on retail investment business in 2016 were £765 million.

“There are a number of issues which this review highlights, such as Performance Fees, Price Competition, Fee Transparency or the Platforms Review. We will be actively engaged with each of these as we seek further clarity on the implications across our member base,” said PIMFA CEO Liz Field.

“The regulator must work alongside industry stakeholders to ensure that any further measures do not negatively impact the market or clients’ access to advice. The Financial Advice Market Review highlighted the need to expand access to advice, and PIMFA will continue to work with the FCA, engaging with the working group to ensure that the full implications of the impact of potentially ending trail are properly understood.”