A Chartered Financial Planner says the FCA’s Asset Management proposals are “very positive” because the current system seems unfair on investors.

Gemma Siddle FPFS Chartered FCSI CFPTM from Eldon Financial Planning welcomed the proposed changes announced last week.

The FCA will ask fund managers to disclose a single, “all-in” fee to investors to help tackle weak price competition.

The regulator published the final findings of its asset management market study and announced a package of “remedies”. The moves may also affect pension schemes and there will be a review of investment platforms. Investment consultants will also be reviewed.

Ms Siddle told Financial Planning Today: "We see this change as a very positive thing. It is designed to bring clarity in charges and thus more competition, theoretically driving down costs to investors. An investor will receive the return minus charges so driving down costs is generally good news.

“The FCA report found that (in actively managed equity funds) as fund size increases, price does not fall, suggesting the economies of scale are captured by the fund manager rather than being passed onto investors in these funds.

“This doesn’t seem fair. The evidence the passively managed funds have generally reduced charges as competition and clarity of charges increases suggests that this strategy from the FCA may work.”

The asset management sector at “worse looks like a cartel” and should not fear revealing “the real price of the services”, some industry professionals said last week.

Ms Siddle said: “We welcomed the previous move from AMCs to OCFs and we see this as the next step.

“As a firm, we have taken into account the cost of portfolio turnover in funds for well over a decade now, but establishing this is not as easy as it should be!

“Being clear, fair and not misleading is vital in maintaining consumer confidence in our profession, particularly post-credit crunch when many people still view finance and banking with suspicion."

John Sloan, Financial Planner at Navigator FP in Northern Ireland, said: "Any change in legislation that is aimed at increasing transparency and trust, and therefore enhancing the client experience in the financial services is to be welcomed.

"It should be viewed as an opportunity for Financial Planners to engage further with both existing and potential new clients to further demonstrate how investing for one's future can be a positive experience.

“At Navigator we provide clients with an evidence based investment experience with lower overall investment charges. We are also very clear about the charges that can and will be incurred throughout the investment process for clients."

Chartered Financial Planner Tamsin Caine from Smart Financial in Altrincham said: “I hope that it will be the start of active funds providing value for money to their investors.”

She said: “Charging structures of funds have changed many times over the years with AMCs, TERs and OCFs. To have a clear understanding of what is being charged, rather than an estimate, is essential.”