DFMs under pressure over portfolio charges as FCA considers review

Discretionary fund managers are facing growing pressure to standardise managed portfolio fees as the FCA considers warning advisers against using any service where costs are not clear.

The regulator is understood to be reviewing its suitability guidance with a view to publishing a full thematic review into adviser due diligence. As part of this, the FCA is expected to touch upon the difficulties for advisers when comparing DFM performance. In particular, the widespread practice of DFMs quoting performance gross of fees could fall foul of general guidance from the regulator around fee disclosure, something which may bring discretionary portfolios in line with the fund industry. All UCITS funds are required to quote net performance – which excludes their own fees and ...