The UK asset management industry will be hit harder than any of its European rivals if the EU pushes on with its fund manager bonus cap, reports PricewaterhouseCoopers (PWC).
The European Parliament’s economic and monetary affairs committee agreed for managers’ bonuses to be restricted to 100% of the basic salary, with half being paid in shares in the funds they manage.
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PwC reward team partner, Jon Terry, said the vote in an "important marker in the debate on bonus caps" for the asset management industry.
Terry said: "If the final rules are even close to what has been agreed today, then this will fundamentally change the way asset managers are paid. Asset managers who manage Ucits products are likely to push-back on why they are now facing the toughest pay rules across the whole of the financial services sector."
Terry also warned that the committee’s definition of individuals facing a bonus cap could hit people in senior management and the front, middle and back offices. The industry has to build a persuasive case for the EU to water down the proposals, he added.
The move comes the day after chancellor George Osborne unveiled a package of measures in his Budget 2013 to help support the UK asset management industry and make it more competitive internationally.
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