Asset managers have been told to justify the fees charged on their funds.
The Financial Conduct Authority said a review of fund managers showed that profitability concerns are influencing how much to charge clients.
The rise of passive investing in recent years has spurred competition within the industry, forcing some funds to reduce their fees.
The Financial Conduct Authority said a review of fund managers showed that profitability concerns are influencing how much to charge clients
But despite the reduction the regulator wants to reform the way fees are calculated, arguing that some asset managers are not giving good value.
Camille Blackburn, director of wholesale buy-side at the FCA, said: ‘It is vital that firms make sure they are not solely focused on a fund’s profitability over value for money for investors.’
The FCA warned companies it would take action where necessary. She also said value assessments must be carried out properly and issues resolved swiftly.
