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Transition mgt wants to rebuild trust
27 September 2013
The transition management industry is working hard to rebuild confidence and more effectively manage conflicts
of interest, finds Andrew Sheen
There are few industries where such longstanding trust has been so quickly lost.
The UK’s financial regulator, the Financial Conduct Authority (FCA), has started investigations into the transition management industry, examining “unclear fee structures”, opaque and confusing documentation and the use of affiliates, which it warned could “result in poor customer outcomes and cause a deterioration in market confidence”.
It noted: “The level of transparency and market conduct among transition management participants is not to the standard we require.” The FCA has also visited the offices of UKbased transition managers on a widespread factfinding mission and is expected to report back on its findings later this year.
Chris Adolph, head of transition management Emea at Russell Investments, says increased attention from the FCA is “not surprising”, given the recent controversies (see page 24), but adds that the FCA’s activities were “exploratory”: investigating how the industry works and whether the...
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