Value Assessment: What Next?

Matt Harvey

What Next?

As asset managers conclude their Value Assessment design phase and start to move into implementation, many are starting to ask, ‘what next?’ How do we take the approach we have defined on paper and translate this into practice? How do we take the data we have analysed and distil it into meaningful reports that allow our Board to review and challenge effectively, and can also be simplified into investor-friendly statements? How do we ensure that the output we produce stands up to the FCA’s scrutiny and that the process is scalable and repeatable?

Operating Model

Asset managers will be thinking about how to create an operating model that enables them to deliver, and develop, the defined approach for assessing each of the seven Value Assessment criteria but that also embeds value as a core consideration at every stage of the ‘product lifecycle’. This is now a critical consideration in new product approval processes if Asset Managers are to demonstrate a sustainable commitment to value.

Onboarding extra resources in line with a clearly defined operating model will give firms the opportunity to familiarise their delivery team with the Value Assessment approach and fully embed the new reporting process into existing reporting cycles.


Independent Non-Executive Directors (“INEDs”) are fully aware of the FCA’s expectations of them following the Regulator’s recent briefing. They are expected to input into and challenge the proposed approach, and also the execution of the ongoing Value Assessment. Asset managers whose INEDs have already been closely involved will find themselves at an advantage as they move into ‘business as usual’ delivery. The FCA has been very clear that it expects INEDs to play a key role in championing investors’ interests.

Asset managers are considering how best to delegate ongoing responsibility for delivery of each element of the Value Assessment. Whilst overall responsibility sits with the chair of the Authorised Fund Manger’s (“AFM”) Board, it would be pertinent for this person to nominate a delegate to oversee the day-to-day delivery of the Value Assessment, managing all the associated inputs and stakeholders.


Firms who have opted to report using the consolidated reporting approach are finding that they need to schedule extra Board sessions, following their chosen reference date, to ensure that enough time is dedicated to the discussion and sign-off of each in-scope fund.

As reporting templates and processes for delivering external statements are defined, asset managers are expected to consider the requirements and preferences of their audience. As the document will be investor-facing, it will need to speak to the investor in a language that they can readily understand whilst only covering the topics that concern them. There is relatively little in the way of prescriptive rules concerning the final report outputs, so within the bounds of COLL 4.5.7, firms can be creative in the way they present information to their end investors. Asset managers may utilise industry surveys, opinion polls, focus groups and the FCA’s Occasional Paper No. 32 (2018, Now You See It: Drawing Attention to Charges in the Asset Management Industry) to better understand the sort of information investors are interested in and the factors they consider to be key value drivers.

FCA Scrutiny

The FCA concluded from the Asset Management Market Study that the industry typically demonstrates weak price competition and sustained high margins. Firms’ governance models were also found not to be serving the end investor as well as expected. The FCA has put the onus on asset managers to demonstrate how their services deliver value, why the charges they levy on investors are fair and, where this is not the case, to demonstrate they are taking appropriate remedial action.

Centring the Value Assessment output around the end investor will give asset managers the opportunity to demonstrate to the FCA their commitment to the needs of investors over their shareholders and profits.

One thing that is certain is the FCA’s commitment to the cause: The Value Assessment is proving to be just one of the levers the FCA is pulling to stimulate the outcomes it seeks following the Market Study and has made it clear it intends to monitor developments closely.


About the Author

Matt Harvey
Senior Manager

Matt is a Risk and Compliance SME with experience across a range of clients in the Asset Management industry. He has worked with a number of firms helping to define, review and challenge their approach to the Value Assessment. Matt sits on Alpha's Asset Management Market Study SME panel.