The FCA announced a radical overhaul of the asset management sector this morning.

It will ask fund managers to disclose a single, “all-in” fee to investors to help tackle weak price competition.

The regulator published the final findings of its asset management market study and announced a package of “remedies”.

The moves may also affect pension schemes and there will be a review of investment platforms. Investment consultants will also be reviewed.

For more on today’s announcement including the impact for fund ratings, platforms and more click HERE.

Here is a round up of the reaction:

Tom Sheridan, chief executive, 7IM

The concept of an all in fee is common sense and can only be good news for investors. The challenge is to ensure that asset managers report this fee in a consistent, comparable way and that there are no unintended consequences along the way.

Andrew Carter, CEO of Royal London Asset Management

The FCA has chosen a sensible way forward, both in how it will engage with the industry and with its implementation timetable, taking account of upcoming EU legislation and Brexit.

At the heart of its proposals stands the customer. As an asset manager owned by a mutual company this is already very much part of our ethos. Transparency is an important guiding principle, which benefits not just consumers but also the industry at large and therefore we support the move towards clearer presentation of costs and charges for consumers.

As an active and passive manager we are pleased to see recognition that both active and passive strategies are valid and can complement one another in the best interests of consumers.”

Tom McPhail, Hargreaves Lansdown’s head of policy

The FCA’s proposed remedies around fund manager governance, price disclosure and on benchmarking and objectives all appear to strike a sensible balance between disruption and stability, and are clearly taking account of investors’ long term best interests: they’re challenging the industry without dismantling it.

It is notable the FCA highlighted their view on active vs passive investing, stating ‘One point raised in the feedback, which we want to address, was a perception that our interim findings suggested that passive funds were preferable to active funds. This is not the case. Rather than focusing on one strategy over another, we think it is important that investors understand both the total cost of investing and the objectives of the fund or mandate they are investing in, so that they can choose the product that best meets their needs’.

Marina Cremonese, a Moody’s vice president and senior analyst

Momentum in the shift to passive investing accelerated today with FCA’s proposed remedies which will negatively pressure active asset managers’ profit margins.

Initiatives like these which aim to promote transparency of fees [combined with other new regulatory rules such as MiFid II] will lead to greater usage of lower-cost passive options, like ETFs, where there is significant room to grow

Graham Vidler, director of external affairs at the Pensions and Lifetime Savings Association

Pension funds have over £1.9tn assets under management in the UK and are some of the investment management industry’s largest clients. The PLSA has been calling for greater cost transparency and expressed concerns about cost levels for some time. These issues ultimately impact the value of people’s retirement savings and we therefore welcome the FCA’s commitment to address the serious issues facing the market.

The report’s proposals on consolidation and governance reflect our Defined Benefit Taskforce’s work in this area. The taskforce’s research suggested that larger schemes could use their size to achieve savings on their asset management fees.

We also believe that common governance arrangements, where schemes are brought under the supervision of fewer but more experienced trustees, could also mean schemes are better able to scrutinize and hold their asset managers to account. We strongly welcome the FCA’s commitment to working with the DWP to remove barriers to consolidation and pooling.

Institutional investors, however large and however well-governed, need a competitive, transparent market in order to deliver the best outcomes for their members. This report makes important recommendations relating to the disclosure of investment costs and scrutiny of consultants working in the institutional market. We look forward to continuing to work with the FCA to develop these proposals and support the development of an investment management sector that works in the best interests of pension schemes and their members.

Dan Mikulskis, head of defined benefit pensions at Redington an investment consultancy

We welcome the increased focus on the investment consulting industry, as advisers on trillions of pounds of assets and the financial futures of millions of people and their families we believe the investment consulting industry has a privileged position and a profound economic and social reach. It is only right and proper that the industry receives scrutiny.

We look forward to the opportunity we now have to work with the industry on the UILs. In our original response to the FCA we noted that given recent competitive trends in the industry (of which the growth of our firm over 11 years is one example) we did not believe a referral to the CMA was warranted for investment consulting and we continue to believe this is the case. We noted we had some concerns around competition for fiduciary management at the point of sale, and we need to consider whether the UILs go far enough in this area.

We want to ensure that recent trends in increased competition in the industry continue, and most importantly that clients and underlying members benefit from any future changes to the regulatory landscape affecting consultants.