Industry Cost Structure

Thinking

Where will the Spotlight shine next?

In the recent past we have seen the FCA turn its attentions to the cost structure of the industry. 

In October 2013 Martin Wheately questioned whether the costs are transparent and whether there are conflicts within the system.  More recently there has been interest in how firms make their money and whether decisions might have been taken on a could we basis rather than should we.  In the last few weeks there has been direct interest in whether holders of old pension products are being charged fairly with respect to more recent products.

Within these enquiries there have been various elements of conduct risk discussed.  Is one set of clients being treated fairly with respect to another?  Are investors and shareholders being fairly represented in the considerations?  There was discussion of whether cross subsidies are in evidence.

The asset management industry has quite a complex financial value chain, particularly when services are outsourced.  What would be the finding if that attention were turned on fees for Middle Office, Custody, Stocklending and Cash Management services?

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By Colin Shapiro

Responsible for Product Development at Knadel, Colin is a consultant with extensive experience gained in both line and consulting roles. He has deep experience of outsourcing, having worked within the outsourcing industry as well as advising clients as a consultant.

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