The U.K. financial watchdog has blasted the domestic fund management industry for anti-competitive price practices and a lack of transparency over costs and performance as part of a long-awaited report released on Tuesday.

According to the Financial Conduct Authority’s (FCA) damning report which follows an investigation launched in November 2015, fund managers enjoy an average profit margin of around 36 percent while the majority of both actively and passively managed funds fail to outperform their benchmarks once fees are taken into account.

The FCA was keen to emphasize that it was not suggesting that active funds were inferior to passive funds but that it was critical for the industry to improve transparency in order that investors could make informed decisions about the total costs extracted by funds and their actual ex-post performance, net of fees.

The warning was sounded over the performance of high fee funds in particular, with the report noting that “there is some evidence of a negative relationship between net returns and charges. This suggests that when choosing between active funds, investors paying higher prices for funds, on average, achieve worse performance.”

Coming under particular attack were the funds which purport to be active but in fact contain holdings that differ only minimally from their benchmarks.

“We find that many active funds offer similar exposure to passive funds, but some charge significantly more for this. We estimate that there is around £109 billion ($139 billion) in ‘active’ funds that closely mirror the market which are significantly more expensive than passive funds,” observed the report’s authors.

Also under fire were investment consultants which act as middle men between investors and asset managers, providing fund selection and analysis services to end clients.

The report highlighted concerns relating to conflicts of interest and oligopolistic market tendencies for investment consultants and said it recommended bringing the industry under the regulatory remit of the Treasury.

Turning to retail intermediaries, the FCA said that it has concerns about the value they provide to customers.

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