TheU.K. Financial Conduct Authority said April 7 that its review into assetmanagers found that while most of these firms are investing in line with theirstated strategy, some have unclear product descriptions and inadequategovernance or oversight.
Thereview covered 19 U.K. fund management firms responsible for 23 U.K. authorizedfunds and four segregated mandates.
Itis vital that funds match their stated aims and strategy, irrespective ofwhether a fund is still actively marketed, said Megan Butler, FCA director ofsupervision – investment, wholesale and specialists.
TheFCA said that to ensure investor expectations are met, fund management firmsmust have appropriate oversight to make sure funds are being managed inaccordance with their stated investment policy. The FCA was concerned that thiswas not happening properly with the funds in its sample that were no longermarketed to consumers. None of these funds clearly disclosed the investmentstrategy to customers, according to the regulator.
The FCAwill require fund management firms that did not effectively manage risks thatcould lead to poor customer outcomes to make improvements to their practices.