Kay Review definition

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Achieving greater transparency of costs and charges

Achieving greater transparency of costs and charges Why is greater transparency required? Over time, the Kay Review, the FCA and the House of Commons' Work and Pensions Committee drew the following conclusions in relation to the disclosure of member-borne costs and charges: • the disclosure of costs to retail customers was not comprehensive. In particular, the Kay Review concluded that costs associated with implementing exit, (eg performance fees and costs of portfolio turnover) were not disclosed to pension funds even though they were charged to the funds • disclosure was inconsistent. In its 2014 Thematic Review TR14/7, the FCA found that while some investment firms provided their customers with consistent, combined charge figures across all relevant documents and platforms, there were still examples of investment firms referring to different charge figures across multiple documents, making effective comparisons difficult. Moreover, the opacity of these costs meant that fund managers could pass on costs to customer funds with minimal scrutiny, thus creating a significant conflict of interest • there had...