LONDON: Britain’s markets watchdog is to review the country’s 6.6 trillion pound ($10tr) asset management sector, saying that more transparency may not be enough to guarantee investors value for money.

Governments across Europe want their ageing populations to feel confident about saving more for their retirement, easing the burden on cash-strapped national coffers.

Britain, Europe’s biggest asset management market, has also given pensioners freedom to access their pension pots, sparking concern that investors risk being ripped off.

The Financial Conduct Authority (FCA) said on Wednesday that the time was right for the first study of competition in asset management products and services.

A preliminary review earlier this year raised issues about the 13 billion pounds the sector collects annually in fees, swallowing chunks of returns in some cases.

“Our market study aims to ensure that both retail and institutional investors can get value for money when purchasing these services, which we expect to further strengthen the UK’s position as a major centre for asset management,” said Christopher Woolard, FCA director of strategy and competition.

Profitability of the asset management sector appears to be quite high, with average operating profits of around 35 per cent of revenues, the FCA said.

Published in Dawn, November 19th, 2015