Unclaimed and dormant assets:
A review for the asset management sector
Everybody knows there are a lot of unclaimed assets in the asset management sector, but nobody knows just how much is ”a lot”.
The Financial Conduct Authority
With the changes introduced in 2014 in PS14/9, the Regulator has signalled its intention to turn up the heat on firms to address and resolve their unclaimed assets and to dispose of residual balances.
The Dormant Assets Commission
Announced in December 2015, the Dormant Assets Commission (DAC) reviewed the ‘dormant assets’ problem. It's report is informative but not conclusive. It expands the current scheme to other asset classes and keeps involvement voluntary. It largely turns the problem over to existing regulators to address.
Increasing audit scrutiny
By qualifying audit opinions, major audit firms are also increasing the pressure on investment managers to resolve their unclaimed assets balances. That pressure will only increase with supervisory action.
Increasing attention to the issue will raise the reputation risk of inaction. But firms that act early may even benefit from doing so.
And because it’s the right thing to do
Simply put, the assets belong to someone else. Investment managers should, at least, make those people – or their estates – aware of them.
The quantum of unclaimed assets – the scale – will impact the scope of the best solution; any solution has to work for all parties.
Very little is known about either the scale of the problem or specific challenges impacting firms holding dormant or unclaimed client assets.This research will seek to fill that gap. It will seek to establish both the scope and the scale of the dormant and unclaimed assets problem and to review the common and distinct issues facing the asset management sector. We will deliver the research directly to participants, research partners and supporting organisations only. The research will form the basis of industry responses to the challenges facing the sector as well as inform the industry and firms about the options available and
their respective merits. The research will also enable the sector to respond with relevant information to the call for evidence by the Dormant Assets Commission (issued 10 May; closing 10 June 2016) as well as to address the substantive issues the Dormant Assets Commission is likely to raise.
By conducting the research in association with the relevant partners and industry bodies, we aim to provide an authoritative and comprehensive picture of the dormant and unclaimed client assets issues.