It’s extremely refreshing to see that the FCA has left room for active management to play a meaningful role in the industry. Over time, there are winning and losing active managers, and those who are truly skilled can add enormous value for clients over the long term. It is not easy to find them, but it is worth it.
While both active and passive investment approaches have merit, and both can have a place in the same portfolio, there is increasingly little room for the large portion of the industry that offers undifferentiated products stuck somewhere in the middle.
The FCA has done its part by shining a spotlight on the most egregious practices and putting forward useful suggestions for improvement.
The onus is now on asset managers to rise to the challenge with fresh thinking and innovation, and on investment decision-makers to vote with their feet.
Managing people’s money is a profound responsibility and we owe it to our clients and to the investing public to get it right.
Dan Brocklebank is head of Orbis Investments UK
