“Asset managers are emerging from their comfortable burrow to face a battery of lights.”
Sheila Nicoll, Director of Conduct Policy at Britain’s Financial Services Authority (FSA), had perhaps been reading Kenneth Grahame before her recent speech, and her words are likely to have sent a chilly wind through the willows of the UK funds industry.
The warning “poop poop” being sounded by the regulator has been getting louder and louder. Indeed the FSA may even be traveling faster than Labour Party leader Ed Miliband, who has recently suggested that he would impose a 1 percent cap on pension charges.
It was not so long ago that the FSA took a very different approach and removed its rules on excessive charges on the basis that “there may be no appropriate benchmarks” to determine this. They went so far as to say that “we do not act as a price regulator, and we do not consider it appropriate for us to take such a role.”
At the time, this move seemed all the more surprising as it was this very regulation that the FSA had referred to when trying to allay the Financial Services Consumer Panel’s fear that in allowing performance fees for open-ended funds, there was no requirement to cap such fees.