"It is important the asset management industry, which looks after the savings of millions of investors, is working as well as possible. "
The FCA has issued new rules which require fund managers to annually assess value and charges and move investors into cheaper versions of funds.
The FCA says "agents should be accountable to their underlying beneficiaries on how they deliver value".
It will also require managers to appoint a minimum of two independent directors to their boards and added that responsibility under the Senior Managers and Certification Regime will bring individual focus and accountability.
The FCA will also introduce technical changes to improve fairness around the way in which fund managers profit from investors buying and selling their funds.
The new rules are part of a package of remedies as part of the FCA's asset management market study, which aims to ensure fund managers compete on the value they deliver.
A previous investigation found concerns that even actively engaged investors do not find it easy to choose which fund is right for them.
The FCA is today publishing a further consultation on remedies related to funds providing better information about what they are offering.
This includes proposals on how fund objectives can be expressed more clearly and be more useful to investors, to make it clearer when funds are benchmark-constrained, and ensuring that where a fund uses one or more benchmarks, this is disclosed consistently and explained to investors.
Firms have 18 months to implement the rules on assessment of value and appointment of independent directors, and 12 months for the rules related to the way in which fund managers profit from investors buying and selling their funds.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “The investment choices open to people, and the decisions they make on how to invest, can have a profound impact on their financial health. They can also have consequences for their families, as well as society as a whole. That’s why it is important the asset management industry, which looks after the savings of millions of investors, is working as well as possible. But our market study found evidence of weak price competition in a number of areas.
“Today’s announcements are an important part of a package of measures that, combined, aim to achieve a fair, transparent, open and accountable market.”
Chris Cummings, chief executive of The Investment Association, added: “We welcome the FCA’s announcement today on the latest steps in implementing the Asset Management Market Study.
“Our industry is committed to demonstrating, and delivering, good value to the millions of people who entrust their savings to us. We welcome the FCA recognising that people judge their asset manager by investment performance and service, as well as cost.
“We strongly support a greater emphasis on communication as well as governance to help customers better understand what they are investing in, what they are paying for and what they are getting in return.
“The IA is already working with the FCA in these important areas and looks forward to continuing this in the coming months.”