TCF in the Asset Management Industry 29th May 2008

Transcription

1 TCF in the Asset Management Industry 29th May 2008 Andy Maysey Senior Adviser Retail Distribution

2 Agenda Treating Customers Fairly Challenges facing the Fund Management Industry What the IMA has done What was the result? Where are we now? Other issues

3 Treating Customers Fairly Introduced in Discussion Paper June 2001 Enshrined in Principles of Business (Principle 6) Papers issued on MI, Measuring Outcomes, Culture, Progress etc. Guidance by speeches from FSA Senior Management

4 FSA Treating Customers Fairly Outcomes Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture. Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and targeted accordingly. Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale. Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances. Outcome 5: Consumers are provided with products that perform as firms have led them to expect and the associated service is both of an acceptable standard as they have been led to expect. Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

5 Challenges facing the Fund Management Industry No objections to treating customers fairly but. What does TCF look like in fund management industry? Complexities of disintermediated distribution majority of firms distribute ultimately through intermediaries but increasing gap between FM and customer Platforms

6 Challenges facing the Fund Management Industry Major change in distribution, with rise of platforms, fund supermarkets Open architecture in bank/insurance platforms a major feature Asset managers see themselves increasingly as wholesalers, with funds distributed in a variety of ways (third party branded, white label, fund of funds, manager of managers)

7 Old World? Fund Manager Adviser Customer (domestic fund)

8 Different World Fund Manager Multi manager Life Company Platform Adviser Fund Supermarket Bank Customer (Domestic Funds, International Quoted, Unquoted etc.)

9 Challenges facing the Fund Management Industry Major Issue in late 2007 Guidance issued (DP07/2) and speeches from FSA seemed to indicate that Fund Managers required to collect information on underlying retail investors.

10 What the IMA has done Lobbying FSA through:- Industry Consultative Group Industry Working Party (December 2007) Benchmarking Survey based around FSA s six customer outcomes Workshops based around product lifecycle Liaison with Industry and FSA

11 What was the result? Good Practice Illustrations issued by FSA

12 What was the result? Results from Workshops and Survey indicate:- Sector has taken TCF seriously Senior Management fully committed Firms committed to meet deadlines A lot of work already undertaken But.

13 What was the result? Most FSA Guidance very general Jan 2008 Good Practice Illustrations welcomed Much MI in place already not recorded as TCF Staff engagement is critical Still need to deal with distribution issues Lack of clarity over Institutional Funds

14 Result cont. Refinements will continue Embedding into BAU will it be identifiable? Areas for further work Refining qualitative MI Measuring Culture Assessing and recording individual s understanding of TCF (culture?)

15 Where are we now? Deadline March 31 st Have MI, or other means, to enable firms to test Deadline December 31 st Firms will need to demonstrate they are treating customers fairly Assessment visits by FSA Progress against March 31 st deadline - report in June? IMA continues to lobby FSA

16 Other Issues Effect of the Retail Distribution Review Europe Key Investor Document (KID) Substitute Products UCITS IV?

17 TCF in the Asset Management Industry 29th May 2008 Andy Maysey Senior Adviser Retail Distribution