Regulation to affect asset manager fee practices

impactGlobal asset managers are bracing themselves for the impact of regulation and many believe that proposed changes will affect the way they calculate fees and fund rebates. According to a survey carried out by software provider Bonaire Software Solutions, 50% of respondents said that current proposed regulation, such as the Dodd-Frank Act in the US and the Retail Distribution Review (RDR) in the UK, will change the way they perform fee calculations. Unsurprisingly, 70% of firms expected regulatory scrutiny to increase. Christopher John, CEO of Bonaire, said: "Regulation is putting increased pressure on firms to provide a much higher degree of fee transparency. With Dodd-Frank in the US and RDR in the UK, investment management firms are finding that they need to address new regulatory requirements while managing increasingly complex fee structures and investment products." Conducted in the first quarter of 2011, the Bonaire annual survey polled investment management firms across the globe on the primary challenges associated with fee billing and revenue management. When asked about regulation, 30% of respondents said they believed that regulatory changes will require new audit, control or compliance reporting processes. Fee leakage continues to be a prevalent issue as firms are potentially at risk of errantly charging their investors fees as a result of manual processing, with one out of four firms having experienced fee leakage in the past. Nearly 92% of survey respondents maintained up to 200 fee schedules and almost 60% of firms have changed their fee schedules or investment products over the last year. John said: “Our survey results reflect what we are hearing amongst our clients – that 2011 holds tremendous change for global buy-side firms as a result of regulation." ©2011 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.