On April 6, 2016, the Financial Conduct Authority published its thematic review on how firms in the fund management sector meet investors’ expectations. The FCA considered whether UK authorized investment funds and segregated mandates were operated in line with investors’ expectations as outlined in market material, disclosure material and investment mandates. A sample of 23 funds was reviewed, which were all UCITS schemes sold to retail investors. The FCA found that generally fund management firms had taken the right steps to meet investors’ expectations and comply with their responsibilities to investors and that firms generally provided adequate information about funds’ strategies, characteristics and inherent risks. This provides customers and financial advisers with better opportunities to make informed investment decisions. The review highlights the need for investors to be provided with accessible information on the risks associated with investing; the FCA found that most firms disclosed the key risks associated with their funds. The FCA will be writing to all the firms involved the review to provide individual feedback. Firms that were deemed not to have effectively managed their risks are required by the FCA to make the associated improvements.The FCA noted that it will follow up on the results of the review through its routine supervision.
The FCA’s review is available at: http://www.fca.org.uk/static/documents/tr16-3.pdf.