Darwinism Will Fix the Investment Industry

The Financial Conduct Authority concluded its two-year investigation into the U.K. asset management industry by ordering investment firms to provide customers with an "all-in fee." It's a welcome attempt to eliminate the hidden costs that undermine people's efforts to save for their old age. Far more effective than an increase in regulation, however, is the financial Darwinism already wreaking change on the industry.

The FCA move, announced Wednesday, obliges fund managers to tell investors how much they charge for managing assets, as well as how much is paid to intermediaries and an estimate of transaction costs. While knowing what the fees are is clearly important, achieving lower fees is even more essential to delivering better returns that will let pensioners retire comfortably.