25 July 2011

UK asset managers call for supportive regulatory and competitive environment to benefit investors

The principal risk is that firms may choose to focus future expansion plans outside the UK. To combat these risks, the industry seeks an unequivocal signal from the Government that the UK is 'open to business'.

The asset management industry is calling on UK authorities to ensure a supportive regulatory and competitive environment that will benefit end investors, according to the Investment Management Association’s ninth Annual Asset Management survey published today. The survey reflects in-depth interviews with 30 senior figures, primarily CEOs, CIOs and Chairmen, from a cross-section of 23 firms. 70 per cent of interviewees say the volume and appropriateness of new regulation hitting the industry is a key concern. While the industry welcomes effective regulation, the danger is that even the most well-intentioned measures may result in adverse consequences, which could damage the long-term needs of investors.

Challenges ahead

Asset managers have come through the financial crisis relatively unscathed, but strategic challenges remain. For the past two years, the industry has voiced growing concerns over the competitiveness of the UK as a financial services centre. Although the fear of flight has often been overstated, only 14 per cent of interviewees said the UK was a better place in which to do business compared to last year. 

An industry at a strategic crossroads

The survey indicates a strong £3.9 trillion asset management industry, with asset growth of 17 per cent since 2009. However, asset managers are far from complacent and recognise that more needs to be done to foster greater client trust. Interviewees acknowledged that the industry could do a better job of communicating what asset managers do and what they try to achieve for their clients.

Richard Saunders, Chief Executive of the IMA comments: “While the industry has ridden through the financial crisis well, it finds itself at a strategic crossroads. The mood among firms is generally reflective, as they consider how to confront new challenges and best meet investors’ needs. With some 20 different European legislative measures hitting the industry over the coming two years, it is clear there is a real fear of the adverse consequences of misguided regulation. Ultimately these consequences filter down to the investor."

“Concerns remain over the UK as a financial services centre. When asked about their long term outlook, many senior figures reported rising unease and diminished confidence in the UK. We all want the UK to retain its pre-eminence as a global financial centre, but this will need continued focus from the Government.”

Press release

© IMA