A lack of understanding about the difference between a private equity fund and a hedge fund is undermining confidence in the UK financial regulator, according to a recent survey.
Staff at the Financial Conduct Authority need to give “more educated answers” to questions relating to regulation of the two fund types, said respondents to the FCA’s annual Practitioner Panel survey.
“Most of [the staff] have never traded a financial instrument. They should be seconded to asset managers,” one fund manager said.
A lack of experience is a concern among the financial services industry as a whole, found the study, which establishes the efficacy of the FCA according to the firms it regulates.
Less than half of respondents, 42 percent, agreed that staff had sufficient knowledge to understand their firm – a similar proportion said the same in 2016.
The survey also found that asset managers want clearer communication around Brexit and increased transparency about future plans.
“It was clear from the results that few respondents agreed that the FCA is currently communicating effectively on Brexit. Clearly there is more work to be done in this area,” the FCA said.
It added the Practitioner Panel is encouraging the FCA to “communicate directly with firms on an ongoing basis,” even though specific details of post-Brexit regulation may not yet be clear.
“The message is that firms should continue, as far as they can, with business as usual,” the FCA said.