Boutique asset management trade body, the Independent Investment Management Initiative (IIMI), has published a new paper, Strengthening the UK’s Asset Management Industry, detailing how the UK government could stimulate future growth in the asset management sector .
There were four main areas IIMI members felt needed improvement: streamlining of authorisations; more proactive promotion of UK as an asset management centre; simplification of regulations; and developing a new fund regime.
These improvements could be made by: introducing streamlining for managers who are only selling products to institutional investors; replicating its peers in Luxembourg and Ireland in terms of promotion as an asset management hub; reforming certain regulations to help support the local funds industry; and changing existing VAT rules.
Some IIMI members also argued the FCA should rethink how it supervises investment firms that are marketing and selling funds to institutional clients. One member suggested that firms whose target base is insitiutional should be allowed to engage in a certain amount of pre-marketing ahead of being authorised. This would help boutique asset managers expedite growth when overheads are rising quickly, the member argued.
Other members stressed the application process for investment firms needs to be simplified to entice more firms to set up in the UK.
For this to work, the industry needs to engage more with the regulator about how the UK’s asset management sector can strengthen and enhance its position in the global market.
Nick Mottram, chairman of the IIMI, commented: “As the UK recovers from Covid-19, it is vital that the country’s highly successful asset management industry remains competitive.
“If the UK is able to develop a popular fund structure, it could result in a huge increase in asset servicing roles - many of which do not necessarily need to be carried out in London. If more professional services firms – such as fund administrators – establish themselves in the regions, local economies will flourish.”