Ferguson believes the review is “way bigger” than the Retail Distribution Review, with its wholesale changes introduced at the end of 2012.
“We’ve been asking why asset allocation is the primary driver of returns, but fund management costs are many times more, or why not one single multi-asset fund has outperformed its equivalent Vanguard Life Strategies over multiple timeframes,” he said.
“In 2014 we said the asset management sector was oversupplied, overpriced, underperforming and under attack from all sides.
“We said the regulatory examination of fee transparency and commercial pressure from index funds would help drive a collapse in fees pretty much all across the board. The great big 30-year party was over and the hangover kicks in.
“With the publication of MS15/2.2, this got pretty real.”
Ferguson said neither advisers, nor their clients, gain advantage from their supposedly advantageous collective buying power, while retail funds also cost about four times as much as the institutional equivalent.
He also noted that there is a huge spread between the intellectual property, or talent, of fund management and its cost, while he stressed Nucleus clients are overpaying by as much as £100m every year across the Nucleus wrap alone.