Over the next year, the regulator will assess how asset managers compete to deliver value, and whether they are motivated to control costs for clients.

It will also consider the difficulty investors have in monitoring the performance of their asset manager, the role of investment consultants and potential conflicts of interest arising from the provision of advice and asset management services, and the quality of certain services.

The FCA aims to publish interim findings in summer 2016 and a final report by the early 2017.

The UK is Europe’s largest asset management market, with around £6.6trn currently invested, including around £2trn of pension fund investments, £1trn in retail investment products and almost half a trillion in public sector and charity investments.

A further £1trn is invested in insurance products and £1trn invested in non-mainstream asset management products.

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Christopher Woolard, director of strategy and competition at the FCA, said:

“Asset managers provide an important economic function, bringing together those with money to invest and companies and governments that need capital. Given the significant role they play in the economy, it is essential that competition works effectively for these services.

“The UK is a world leader in asset management. Our market study aims to ensure both retail and institutional investors get value for money when purchasing these services – which we expect to further strengthen the UK’s position as a major centre for asset management.”

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