What is value?

In advance of the September 2019 deadline given to fund managers by the FCA, we are starting on a project to tackle this most grey of questions with consumers, advisers, platforms and non execs.

We will be asking over 2,000 investors what they think value is – and then play these bottom-up insights into a more traditional asset manager view of the world. What else other than price and performance matters?

We are working on a research project with fund analysis group Square Mile to tackle this question, in response to the challenge given to fund groups in their Asset Management Market Study. By September 2019, fund managers will have to evidence and measure value. 

FCA: Evidencing value for money

Are you grappling with the FCA’s requirement for fund managers to assess and report on Value? Are your plans in place to hit the September 2019 deadline? If not, we can help.

Easier said than done.

The challenge reminds me of the problem faced by advisers about 6 years ago when it came to platform selection. The FCA required them to conduct due diligence and evidence why their platform of choice delivered against many metrics, one of which was value to the end customer. No prescribed tick list was issued and advisers needed help with this issue. Transact, one of the market-leading platforms, posed an interesting conundrum. Very seldom the cheapest, and often amongst the most expensive, this platform was nonetheless loved by advisers whose clients arguably paid for the excellent service, very little of which rubbed off on them. There were a couple of layers of value to consider in that one. Price. Service. Service to who?

One of the minimum 7 criteria specified by the FCA is Quality of Service. This is tricky to unpack. Phone service might be awesome and abandon rates 0%, but if asset managers are only getting say 5,000 calls a month from direct customers, and the rest go via platforms and advisers, how big is the impact of that? Perhaps more broad in its relevance is communication and information. Do people know what this fund is trying to achieve? Does its name mean anything? Does it state its aims and objectives? Can investors find what they’re being charged without taking half an hour and resorting to a magnifying glass? How well are updates given? By way of example, investors love Terry Smith’s updates and meetings.


We need to look at price and performance.

Both in relative and absolute terms. And whether the fund has delivered on its investment objectives.

This is a complex area which cannot be tackled with a neat small static matrix, to suit all managers and funds. Value is in the eye of the beholder and if I’ve learnt anything about customers it is that they are not symmetrical. Nonetheless I think it crucial to start this process by talking to the people who pay for these services – and from that to build a bottom-up approach to crafting a framework which can be taken and used by asset managers to reflect their product sets and objectives.

This will be a pointless exercise if asset managers approach it as a tick box exercise to mark their own homework, and report back in glowing terms.


There are plenty I have talked to who are genuinely approaching this as a chance to question and identify how well they are in fact doing. Because this question surely lies at the very heart of their existence. It is fundamentally core to what they do and who they are. Sadly there are still some who think of this solely as an exercise to ‘get them’ and are so anxious to protect margin, that they are not in fact asking themselves any questions.

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