Andrew Strange, PwC director, comments on this morning's FCA Asset Management Market Study policy statement and consultation…

The FCA has struck a pragmatic balance between prescriptive rules and flexible guidance, and the rules should be welcomed by the industry and consumers.
 
Delivering value for money for investors has always been a key tenet of the asset management industry. Changes to focus on wider value, rather than just charges, will better enable firms to demonstrate this value to their customers, although the new public statements could risk overloading consumers with information.  However, updating guidance to make it easier for firms to switch investors to cheaper versions of the same fund is an example of the regulator helping firms deliver value.
 
Increased implementation periods to appoint independent NEDs will be welcome, but still doesn't account for the potential de-scoping of NED authorisations under the SM&CR. Until the scope of SM&CR is clear, it's possible some firms could have to bear the cost of authorising a NED, before almost immediately deauthorising them under the new regime. Independent NEDs can bring an important perspective to a board, but they are not a panacea and must be seen in the context of wider governance and board specialism.
 
In addition to the final rules, the FCA's consultation proposals will go some way to helping investors compare funds and decipher some industry jargon. It's refreshing to see the FCA using behavioural techniques and customer research. Many of the proposals originated from working groups run in conjunction with the industry, which should result in workable solutions that benefit consumers. As always, however, the challenge for the industry will be the breadth and diversity of funds, strategies, firms and approaches covered by this set of rules. These changes will also pose some risk for firms in the future, as they will need to be even more vigilant in how they use benchmarks in marketing materials and represent fund performance when no benchmarks are used.