The Financial Conduct Authority (FCA) has reminded firms about the importance of treating customers fairly (TCF) in the world of passive investing, by fining Henderson Investment Funds approximately £1.9m for TCF failings. 

Fund managers will already be aware of the FCA’s ongoing concerns around so-called "closet trackers" (passively managed funds that look and charge like active funds), so this FCA fine is a clear warning message to the industry that: 

  1. investors must receive value for money and management fees must be commensurate with services provided; and 
  2. generally institutional investors should not be treated differently to retail investors.