The Financial Conduct Authority (FCA) will investigate high and complex fund management charges, and the extent to which they harm consumers, during its first year of existence.
The FCA said fund management fees have risen over the last 10 years, additional "hidden" charges have increased, and charging structures have become more complex as performance fees have become more common.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The regulator said there is evidence that fee structures may exploit consumer behaviour, such as through complex charging structures that make price comparisons difficult.
The concerned firms are applying more complex fee structures to retail customers than institutional clients, and the long-term impact of small increases in annual charges are being downplayed, the FCA further added.
The regulator also raised concerns about "highly intermediated markets" where distributors along the product chain can charge fees at multiple stages of the investment process.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
