Asset manager fees still misleading

The UK regulator has rebuffed calls from asset managers to push for changes to new EU cost disclosure rules, saying that the extreme results thrown up by the regulation are a result of poor compliance. The Financial Conduct Authority said that it had uncovered problems with the way asset managers calculate and present transaction costs under the Priips (packaged retail and insurance-based investment products) regulation. Priips obliges investment groups to disclose the transaction costs incurred by their funds for the first time. The requirement has been heavily criticised by the sector, which argues that the calculation methodology stipulated in the regulation produces confusing results, including negative transaction costs. However, following a recent review of the application of the new rules, the FCA said that it had not found “credible evidence to support claims that the methodology is not working as intended”.

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