Central Bank to investigate fees asset managers charge investors
Published 14/12/2015 | 02:30
The Central Bank is set to begin the largest ever investigation in Europe into the fees asset managers charge investors next year.
The regulator, which oversees more than 6,000 funds, including 3,725 mutual funds, is to examine whether the investment products offer "value for money", according to the 'Financial Times'.
The probe will likely be a worry for asset managers, which have already seen their profits hit due to consumers demanding lower cost products.
The industry has received unwanted attention in recent years amid allegations that some firms have been charging prices commensurate with actively managed funds, but have instead been operating under passive investment strategies. That practice, known as "closet tracking", will also be investigated by the Central Bank.
The risk culture within financial firms and the resilience of their IT systems are among the priority areas for the Central Bank’s inspectors next year.
“Consistent with the Central Bank’s mandate of investor protection, market integrity and financial stability, we are embarking upon a large number of themed-inspections for 2016,” the Bank’s director of market supervision Gareth Murphy said.
He said an underlying theme for the inspections is “the need to strengthen firms’ culture of regulatory compliance”.
The Bank will also to continue to monitor company directors’ board commitments, as well as examining financial firms’ outsourcing arrangements.