Commenting on the FCA’s decision to fine Henderson £1.9m for fund failings, Ryan Hughes, head of active portfolios at AJ Bell, said:
“For some time now we have known that the FCA was looking at potential ‘closet trackers’ and back in March last year it announced that a number of firms were being forced to compensate investors for misleading marketing information. It stated that two enforcement actions were ongoing and today we have learned that Henderson has been fined for not treating customers fairly who were invested in their Japan Enhanced Equity & North American Enhanced Equity funds.
“In other markets, regulators have been very active for some time around closet trackers with Norway, Sweden and Germany all seeing action being taken against managers, however, this is an important step forward here in the UK demonstrating the importance of asset managers justifying the fee’s being charged for supposed active management. When the Asset Management Study came out in 2016, it was hoped this would be a catalyst for change with asset managers being forced to update their fund ranges to be fit for purpose. As yet, we have not seen much evidence of this but with the requirement now to produce ‘assessment of value’ statements, it should be harder for closet trackers to hide and hopefully investors will have a better understanding of how their money is being invested and whether it is actually delivering for them.”