IG chief welcomes FCA Asset Management Market Study ahead of robo advice push

The head of one of the latest entrants to the disruptive wealth management space lends support to the UK financial regulator’s landmark report

The head of one of the latest entrants to the disruptive wealth management space lends support to the UK financial regulator’s landmark report.

Greater transparency on fund management fees are needed to generate better returns for investors, according to Ian Peacock, head of UK and Ireland at IG Group.

Peacock’s comments follow the publication of the Financial Conduct Authority’s (FCA) ‘final’ and broad investigation of the investment management industry, which while softer in tone than some expected, was scathing on vast swathes of the market over fees, disclosure and ‘closet tracking’ of benchmarks.

For Peacock (pictured), whose firm has launched its owner robo advice offering back in April 2017 – called IG Smart Portfolios – the report takes fair aim at the slow change within asset management in recent years for greater competition.

“We welcome the FCA’s final report of its Asset Management Market Study and its call for more transparency on fees and benchmarks. These changes will only lead to more positive investment outcomes for consumers. Hidden charges have been materially eating into investment returns for years.

“Being upfront about charges, allowing investors to see their total cost of ownership, will inevitably lead to fee savings overall, meaning a greater portion of an investor’s returns can be reinvested, generating further earnings.”

IG Smart Portfolios are a range of risk managed investment portfolios. There are no set-up, dealing, rebalancing or exit fees and investors get complete transparency on total costs of the portfolios, with “no hidden charges” according to Peacock.

He adds that fee transparency in the wealth management industry has come under increased scrutiny in recent years, but, while there has been some downward pressure on fees, the sector has been slow to change.

“We have long held the view that many wealth management providers fall short when it comes to fee transparency, leaving investors in the dark about the true cost of investing and the impact it will have on their returns. The changes from this review will hopefully mean that investors are finally no longer blindsided by fees.”