Nick Miller, head of asset management at the Financial Conduct Authority, said governance is the top concern for the UK regulator’s review of the sector, and it is correlated to culture.

Miller spoke at the City & Financial Global conference on Regulation of Asset Management in London today.

FCA’s Nick Miller speaking at the Regulation of #AssetManagement conference in London today pic.twitter.com/pu5peeBlXF

— vanya_damyanova (@vanya_damyanova) October 14, 2019

He explained that the FCA  looks at the sector through three lenses – value for consumers, as participants in wholesale markets and as stewards.

“Top of our list is governance,” added Miller. “We do not see enough evidence of strong governance at the level of the legal entity being regulated.”

Miller continued that governance is correlated to culture as it is the responsibility of senior management to ensure that incentives are in place to encourage a diverse and inclusive culture.

Juliet Bullick, global head of consultant relations at Fidelity International, said on a panel that the business case for diversity has been well made, but the pace of change has been glacial in some sectors.

‘To what extent have culture and conduct changed in the industry?’ panel with David Styles @FRCnews Juliet Bullick @Fidelity_UK and Adam Jacobs-Dean @AIMA_org #AssetManagement pic.twitter.com/ukCTJoPHvI

— City & Financial (@cfconferences) October 14, 2019

“Diversity leads to stronger financial performance and the ability attracts and retain talent,” she said.

Bullick added that diversity has also become a commercial imperative as clients, especially public authorities, ask about diversity when looking to award mandates.

FCA’s Nick Miller day’s regulator sees lot of inadequate technology spend and firms still using systems which are reaching the end of their life #AssetManagement

— Shanny Basar (@shannybasar) October 14, 2019

Impact funds

A theme of the conference was the demand for environmental, social and governance strategies. Campbell Fleming, global head of distribution at Aberdeen Standard Investments said Aberdeen Standard and other fund managers are setting up the first global platform for impact funds.

Fleming @ASInvestmentsUK says every mandate firm has won this year has involved ESG discussions #assetmanagement https://t.co/CkQkHjJdee

— Shanny Basar (@shannybasar) October 14, 2019

“This will include a digital passport for the financially excluded who are estimated to hold 30% of the world’s wealth,” added Fleming. “We cannot just serve large wealthy customers.”