A review into the way UK asset managers run their funds has uncovered examples of unclear product descriptions and inadequate oversight.

The Financial Conduct Authority (FCA) looked at 19 investment firms and found that some funds were not providing a clear enough explanation of how they were managed.

Others failed to disclose a constrained investment strategy and one included jargon that ordinary investors would be unlikely to understand.

“Firms are generally managing funds as they say they will,” said Megan Butler, FCA's director of supervision - investment, wholesale and specialists.

"In most circumstances they are clear about how they are going to invest and have the correct level of oversight to ensure practice follows promise.

“However, the industry needs to consider how it communicates when funds are linked to financial benchmarks,” she added.

Butler also said it is vital that funds keep investment practices under review so they match their stated aims and strategy, irrespective of whether the fund is still actively marketed.

Not all the firms sampled by the regulator carefully monitored the distribution of their funds.

For example, two funds that were available on execution-only platforms when the fund management company had planned for them to be available only with advice.

In contrast, five firms were investing in smarter ways to analyse data from their distributors to better understand the types of customers that were investing in their funds.

“All fund management firms should consider the findings in this paper and review their arrangements accordingly,” the FCA said on Thursday.

The UK fund industry manages over £6trn of assets, with UK domiciled funds worth more than £800bn on behalf of institutional and retail investors.

In November 2015, the FCA published the terms of reference for its asset management market study.

The aim of the research will be to understand whether competition is working effectively to enable investors to get value for money when purchasing asset management services.

The watchdog expects to publish an interim report this summer.