In a press release issued on the FCA website, Megan Butler, FCA director of supervision – investment, wholesale and specialists, said: “The industry needs to consider how it communicates when funds are linked to financial benchmarks. It is also 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, because investors base their decisions on this information.”

In a recent article, the Financial Times noted that of the 23 actively managed funds under the spotlight, the FCA investigation found that five investment managers were incorrectly marketing actively managed products, while seven of the funds analysed had misleading marketing materials and unclear product descriptions.

It is important to note that the investigation found that the majority of firms are managing funds in accordance with their stated intention. “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,” said Butler.

The FCA investigation underlines the importance of ensuring that any marketing materials being issued by an investment manager clearly articulates the value proposition and strategy of the fund, even if that fund is no longer being actively marketed to consumers.

In fact, the FCA noted its concern that this was not happening properly with the funds it reviewed that were no longer being marketed to consumers, as none of these funds clearly disclosed the investment strategy to customers.

As regulatory oversight becomes increasingly onerous for investment firms, it is vital that marketing activities are supporting and not detracting from the business. Effective marketing is not simply about adverts and brochures, it has a crucial role to play in the sale and distribution of investment products.