Regulators in Asia's wealth hubs of Hong Kong and Singapore are set to launch new disclosure rules for wealth managers on what they are paid by funds to sell their products.
Hong Kong's Securities and Futures Commission (SFC) and The Monetary Authority of Singapore (MAS) are both working on augmented rules to require trailer fees to be disclosed in the Product Highlight Sheet.
For the boutique sized wealth managers in the region, the disclosure requirements could be bad timing as they are already battling against higher regulation and human capital costs in what is an ultra competitive market.
Shadow of Lehman's Collapse
News site «Reuters» reports that the planned regulation may lead to a drop in fees from such deals and could see clients bypass wealth managers altogether and source products directly from fund managers.
The moves by Hong Kong and Singapore to increase disclosure follow similar initiatives by regulators of some Western nations after investors faced hefty losses on structured products linked to the collapse of Lehman Brothers.
