Fund management industry is going to have to change
For years, the UK fund management industry has been charging fat fees for somewhat slender performances.
Why? The regulatory regime means that fund managers answer upward to regulators, rather than outward to customers. If the customer, not the FSA, was king, there'd be meaningful transparency over fees. There'd be more flexible pricing. There may even be lower fees.
But instead effort and energy go into delivering products that the regulator sanctions, not what the punter necessarily finds attractive.
Scrapping the FSA could provide the industry with a historic opportunity to get the regulation right. But will it?
Maybe. Or perhaps the fat fees, lack of transparency and absence of competition for customers suits some players.
Yet if we are serious about clawing our way out of debt, Britain needs radical changes to encouraging saving. No, that absolutely does not mean compulsory savings or curriculum courses. It means less government. It means public policy changes to foster a cultural shift in attitudes that would empower more people to take responsibility for their own financial security.
To do that, fund management, and government policy, is going to have to change.
Posted on 4 November 2009 by Douglas Carswell