"Fundamentally, we should only be able to do well as a firm, and individually, if our do clients well. So, the long-term value we deliver for our clients influences pay and remuneration for everyone at Orbis.
We all know who the real bosses are.”
This is also reflected in the fact Orbis will refund performance fees paid when the manager underperforms, so the company is penalised for failing to deliver value, just as it rewards managers for superior returns.
Regulatory view
The issue over fund manager remuneration is not new: the Financial Conduct Authority has been exploring issues around remuneration and fund manager fees for years, something which has come into greater focus post Consumer Duty.
Last August, the FCA looked into fair value assessments at investment management firms in the light of the consumer duty obligations, which came into force in July 2023.
At the time, Camille Blackburn, director of wholesale buy-dSide at the FCA, said: "It is vital that firms make sure they are not solely focused on a fund’s profitability over value for money for investors. The Consumer Duty, which is now in place, further supports our expectations in this area."
Among other things, the review found "significant differences between good and poor practice in how AFMs assess their funds’ performance".
Moreover, it found: "Firms putting too much emphasis on comparable market rates to justify their fees, rather than conducting an assessment using the full range of value assessment considerations."
simoney.kyriakou@ft.com
