FCA has published the terms of reference (TOR) for its market study into competition in the asset management industry. It says that over the next year it will assess:

  • how asset managers compete to deliver value;
  • whether asset managers are motivated and able to control costs along the value chain; and
  • what effect investment consultants have on competition for institutional asset management.

FCA will also look at whether there are any barriers to innovation and/or technological advances in asset management. The study will consider both retail and institutional investors, and FCA hopes to publish interim findings in summer 2016 and a final report by early 2017. Depending on the results of the study, FCA may:

  • decide it need take no further action;
  • initiate market-wide changes, for example to certain rules;
  • take firm-specific action where warranted; or
  • refer the matters to CMA for a competition investigation.

FCA will be approaching market participants directly, but welcomes views generally by 18 December. (Source: FCA Publishes Asset Management Review TOR)