One of the key issues that the FSC will be investigating is whether investment managers are charging excessive fees that are not commensurate with the level of service provided. In recent years, there has been a growing trend among investors towards passive investing, which involves investing in low-cost index funds that track the performance of a particular market or index.
This trend has put pressure on active investment managers to justify the fees that they charge, and to demonstrate that they are able to generate returns that are higher than those achieved by passive investments. However, there is some evidence to suggest that many active investment managers are not able to consistently outperform the market, despite charging much higher fees.
Another issue that the FSC will be investigating is the level of disclosure provided by investment managers around their fees. Many investors in Mauritius have complained that investment managers do not provide clear and transparent information about their fees, making it difficult for investors to compare different products and make informed investment decisions.
This lack of transparency has led to concerns that some investment managers may be charging hidden fees or engaging in other practices that are not in the best interests of investors. By investigating the fees charged by investment managers, the FSC is aiming to promote greater transparency and accountability in the industry, and to ensure that investors are fully informed about the costs of investing.
The FSC has indicated that it will be working closely with investment managers during the investigation, and that it will be providing guidance and support to help investment managers comply with the regulatory requirements around fees. The FSC has also indicated that it will be taking a risk-based approach to the investigation, focusing on those investment managers that are perceived to pose the greatest risk to investors.
The investigation by the FSC is part of a broader trend towards greater scrutiny of the investment management industry, both in Mauritius and around the world. In recent years, there has been a growing focus on the fees charged by investment managers, and on the need for greater transparency and accountability in the industry.
In the United States, for example, the Securities and Exchange Commission (SEC) has been taking a closer look at the fees charged by investment managers, and has been urging greater transparency and disclosure in the industry. Similarly, in the United Kingdom, the Financial Conduct Authority (FCA) has been focusing on the fees charged by investment managers, and has introduced new rules to promote greater transparency and accountability.
The move by the FSC to investigate the fees charged by investment managers is therefore part of a global trend towards greater scrutiny and regulation of the investment management industry. By promoting greater transparency and accountability, regulators are seeking to ensure that investors are able to make informed investment decisions, and that they are not being taken advantage of by unscrupulous investment managers.
