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Technical Briefing: The FCA Assessment of Value 2023 review


The UK FCA has published the results of its 2023 review on Assessment of Value (AoV) which highlighted continued failings, alongside examples of good and poor practice, and a reminder of the alignment to the ‘now live’ FCA Consumer Duty.

Since inception, in 2019, the industry has been trying to align to FCA expectations as the drive toward better outcomes, in this case value, for end investors. The latest review considered 14 firms of different sizes, reviewing their AoV process, inputs and governance. Findings were compared to the output of the 2021 review, alongside the FCA Handbook rules and guidance.

In our technical briefing note, the Devlin Mambo team have considered the latest FCA review, summarised the key points, provided our view, and highlighted suggested actions for firms.

High level summary of findings

In general, the review highlighted a better understanding of FCA expectations and improved AoV processes. Firms were less reliant on assumptions and provide a better quality of MI to AFM Boards and AoV committees. The FCA make the following key points:

  • Firms must substantiate any claims they make
  • Remedial action is evident to address poor value, with a reduction in fund fees for end investors - a big win for the FCA in highlighting the effectiveness of AoV!
  • Despite better justification of fees, the FCA did not see remedial action to cut fees and any which were, were generally driven by comparable market rates
  • Any cut fees aligned to comparable market rates resulted in ‘price clustering, which has been previously highlighted by the FCA as a market failing
  • Tensions between fund profitability and value for money appear to influence AoV decision-making
  • Decision-making that failed to link to reasonable outcomes was highlighted as a failure of rule compliance for the AFM board and senior managers accountable

How can we help?

Since 2019, Devlin Mambo have been closely involved with helping our clients with Assessment of Value, and more recently with Consumer Duty implementation. We have a detailed knowledge of FCA expectations, and a practical approach to ensuring compliance aligned to your business model.

At Devlin Mambo we are continually monitoring, considering, and providing thought leadership and advice to our clients to help with their ongoing regulatory strategy, and implementation. If you would like to discuss the impact of this paper further, please get in touch with your relationship contact, or a member of the Devlin Mambo team.

About the author

Graeme Devlin

Graeme is a co-founder of Devlin Mambo and leads our Product & Distribution and Compliance & Governance practices.

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