British regulators are planning a review of competition in the investment banking business, and they signaled that a review of the asset management business may follow later this year.

The UK Financial Conduct Authority (FCA) announced plans Thursdy to launch its first study into investment and corporate banking to assess whether competition in the sector is working properly. The terms of reference for the study will be published in the spring.

The planned review follows the FCA’s look into competition in the wholesale sector generally, which found that limited transparency may make it difficult for clients to assess whether they are getting value for money; and, that the bundling and cross selling of services could make it difficult for new entrants, or smaller firms generally, to challenge established large players in the market.

“We have chosen this particular area because the benefits of effective competition in the market could be significant. The UK is a global hub for investment banking, and this sector plays a crucial role in our economy, helping companies raise capital for investment, expansion and funding ongoing operations,” said Christopher Woolard, director of strategy and competition at the FCA.

“What was clear from the discussions we had with stakeholders and firms was that there are unanswered questions about potential conflicts of interest and value for money in this market,” he added.

The FCA said that it will also consider studying the asset management business later in the year.

The Financial Services Consumer Panel (FSCP) called on the FCA to follow through with a study of asset management. “The panel is pleased to see that the FCA has decided to examine the investment banking market more closely. We would also strongly urge it to undertake a market study into the asset management sector without delay,” said panel chair, Sue Lewis.

“As the panel’s research has shown, opacity of costs and charges and conflicts of interest in this market have persisted for many years. This is bad for competition and, ultimately, to the detriment of retail investors,” she said.