The review, which was launched in 2015, aims to overhaul the asset management industry to ensure transparency and fair costs for investors.
However, while the aims appear laudable, the response to the asset managers review is expected to be mixed.
“This might be a very good area for the FCA to look into, but it is ill-thought-out to be doing the study now while the industry needs to be concentrating on Mifid II, Brexit and other regulatory changes underfoot,” said Peter Astleford, a partner at law firm Dechert.
“It is counterproductive for the industry and counterproductive for investors.”
The long-dreaded Mifid II, or the second Markets in Financial Instruments Directive, is due to come into force next January and also focuses on increasing transparency.
Despite Astleford's assertion that most asset managers would agree behind closed doors that the FCA's review is mistimed, many have reacted positively to the FCA's interim report published towards the end of 2016.
“The industry study is being painted in some quarters as being 'the regulator versus the industry'. We would definitely differ from that – we welcome the report,” said Dan Brocklebank, director at investment firm Orbis.
The interim report highlighted several key areas which the FCA expects to focus on, including transparency so investors know how well their investments are performing and how much they are paying, and fee structures so that fund managers are not being remunerated disproportionately to their performance.
“We think the point the FCA did get right is to focus people's attention on value for money. The distrust of our industry has come about because most people either know or suspect that they're not getting good value for money,” said Brocklebank.
However, he bemoaned the fact that this did not appear until page 93 of the FCA's interim report and feared that it would not be given enough weight.
There is also a fear that the final report's conclusions could lead to further regulation of asset managers – a possibility which they are unsurprisingly against.
“If you just layer more rules on, there will always be a smart person to find a loophole in the rules. You have to align interests,” said Brocklebank.
He added that the FCA already had broad powers to force an investment manager to act in its client's best interest, and should focus on its enforcement efforts under this power to prevent disproportionate fees being levied.
“The industry is suffering under the welter of regulation that is going on,” added Astleford.
“The ability of the industry to cope with all of this – and concentrate on markets, and be cost effective, and provide a good service, and compete and plan for Brexit – is all too much.”
In terms of whether the FCA will recognise this in their final review, opinion is divided.
“If they reel back from some of their findings significantly, there will be criticism that they didn't understand or follow their data,” said Phil Deeks, of regulatory compliance advisors TCC Group.
Yet he adds that the FCA might face criticism if it sticks closely to what was in the interim report.
This is partly because organisations including the Investment Association have criticised some of the datasets and the way data has been interpreted, and partly because there is crossover with regulations the industry is already trying to work through.
Brocklebank, on the other hand, would be “surprised” if the report gets watered down. “I think the evidence mounting and the political pressure would imply they're going to stay fairly robust,” he said.