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Writer's pictureRobin Powell

A duty of care is the only way to clean up The City

Updated: Nov 25





The Financial Conduct Authority this week published a review into what UK fund managers are doing in response to the Assessment of Value regime introduced in 2019 to improve value for money.


The findings are shocking and show, once again, how lacking the industry is in principles, ethics and self-awareness, and how devoid it is of any sense of duty to those it is meant to serve.


So what can be done to help create a fairer, more transparent fund industry, one that genuinely serves consumers and not just itself? In his latest piece for the True and Fair Campaign, ROBIN POWELL suggests three possible solutions, including a statutory consumer duty of care, with substantial penalties for failing to comply.



This is the time of year when children receive their end-of-year school reports. It’s fitting, then, that the FCA should have chosen this week to deliver its verdict on the first year of its Assessment of Value (AoV) regime, which requires the fund industry to demonstrate the value for money it provides.


Believe me, if this were a school report, fund managers would be kept in class for the summer holidays and made to re-sit the year. Page after page, the report is an absolute shocker.


To recap, the rules on AoV came into force in September 2019, as part of the remedies proposed in the regulator’s Asset Management Market Study. The AMMS found weak demand-side pressure on fund fees, resulting in uncompetitive outcomes for retail investors.

The new rules require fund managers to carry out a value assessment at least once a year and publicly report their conclusions, and to appoint independent directors (iNEDs) to their boards.


So, how did the industry do in Year One? Very badly. Between July 2020 and May of this year, the FCA visited 18 fund managers to review their AoV arrangements, and here are just some of the astonishing shortcomings they discovered.






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