UK markets watchdog says funds failing to come clean on charges

LONDON Tue May 13, 2014 5:51am EDT

LONDON May 13 (Reuters) - Asset managers have been failing to fully explain their charges to investors and supervisory checks will be made, Britain's financial watchdog said in its latest crackdown on the sector.

The Financial Conduct Authority (FCA) said a review has found that some firms did not provide investors with a clear, combined figure for charges in their marketing material or on websites.

"We believe that it is important for investors to clearly understand and compare charges across the market as this, together with fund performance and risk profile, are the key areas that they should look at," Clive Adamson, FCA director of supervision, said in a statement.

"We are therefore today encouraging all firms to respond to our findings and adopt the clarity and consistency we believe to be important."

The FCA said it will follow up this work with firms through its routine supervision and work with the Investment Management Association (IMA), a funds industry body, which has issued voluntary guidance on the disclosure of charges and costs.

Last week the FCA tightened rules on how funds can use customer money to pay brokers for research on stock picks.

(Reporting by Huw Jones, editing by Jemima Kelly)

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