Are you providing “Value for Money?” This is an area of growing regulatory interest. How do you go about creating a consistent framework to assess

John Hall

Asset ManagementAsset ManagementcostESGETFETFsFCAfeesvalue

Asset management should work together to agree a consistent framework to understand and interpret value for money. At present, there is a lot of confusion and many interpretations about the concept.

Key message

Participants agreed that evaluating value for money is useful to assess clients’ satisfaction. It gives a common framework to scope and contextualise services to investors

There are three parts to the framework:

  • Generating risk adjusted returns
  • Cost
  • Additional services provided



  • Value for money is not just about generating returns. Good overall service is what keeps clients happy and prevents them from leaving.
  • There is no industry wide understanding of what value for money stands for – the FCA should play a bigger role in defining this.
  • The framework gives asset managers an incentive to evaluate how they deliver value for money to their clients.
  • Value for money will put further pressure on fees which will impact boutique asset managers most.


Key themes

The roundtable discussion opened with a statement from the expert “Assessing value for money is useful to assess clients’ satisfaction and as an industry we should get ahead of this in front of the regulator and clients”. He also explained that there are three key parts to the framework focusing on returns, costs and other services delivered to clients measured over a certain time period.

The discussion moved on to establishing what value for money stands for and how to interpret it. One participant questioned whether it is all about returns. Participants agreed that good overall service is what prevents clients from leaving, contributing to client retention. There was also an agreement that the FCA’s value for money prompted fund managers to update their client documents – some of them (in terms of structure) have not changed in 15 years.

Participants agreed that there will be further pressure on fees – though participants pointed out that, as an industry, asset managers aren’t good when it comes to defending their fees. An example of St James’s Place was given which is expensive yet continues to attract clients as the level of services is high enough and justifies the fees. Satisfaction with the service is key.

The conversation subsequently shifted to a discussion on how there is a fragmented view of the asset management industry amongst the general public and that the industry has a siloed approach to issues including value for money. Participants agreed that the FCA needs to establish what “value for money” means and that there is a need for a joined-up approach from the industry to establish what is expected and what should be delivered to clients. “We have to be able to speak about the outcomes we have promised”.

The conversation moved on to a debate on value and ESG. The main concern raised was around greenwashing and how many players in the industry are jumping on the bandwagon but are unable to demonstrate their ESG credentials. There is a possibility of a mis-selling scandal if asset managers do not manage to agree a joined-up framework on the measurement of ESG and the value it delivers.

The session ended with a debate on ETFs and whether they present a good value for money in terms of cost. Participants debated whether ETFs are a benchmark when it comes to fees. The discussion focused on whether a large part of the comparison will be against ETFs. The debate concluded with a mention of factor investing and ETFs. Participants agreed that it would be possible to establish which factors are delivering the best results / which ones are responsible for which level of returns and the best “value”.



  • Clarification is needed on what value for money stands for and how the FCA interprets it. Asset managers have a lack of clear understanding of the criteria they will be assessed against.
  • Value for money refers to both the fees and costs but also other factors like ESG and services offered.
  • A joined-up approach is needed across the industry to ensure consistency in reporting.