SCHRODERS PLC 
The Financial Conduct Authority (FCA) said asset managers would have 18 months to prepare for a requirement from September 2019 to make an annual assessment of value, as part of their duty to act in the best interests of investors.
In a requirement that will take effect six months later than originally indicated, asset managers will have to publish their value assessments and show if any corrective action was taken if charges were identified as not being justified.
After pressure from industry, the value for money idea floated in last year's review has been broadened to overall value to avoid what the FCA says is too much focus on costs.
"Changes to focus on wider value, rather than just charges, will better enable firms to demonstrate this value to their customers, although the new public statements could risk overloading consumers with information," said Andrew Strange, a director at consultants PwC.
There is no common template for managers to assess value, they are only asked to spell out the factors taken into consideration such as the range and quality of services provided and the performance of the fund after deduction of all payments.
Fund managers will also have to appoint at least two independent directors to their boards by September 2019.
Shares in leading asset managers outpaced gains in the broader stock market, with Schroders up 1.7 percent and Standard Life Aberdeen up 2 percent at 1031 GMT.
The sector's main UK trade body the Investment Association welcomed recognition by the FCA that investors judge asset managers by performance and service, as well as cost.
But Gina Miller, founding partner of investment firm SCM Direct, said it was shocking how long it had taken the FCA to "achieve nothing more than restating the obvious", without tackling "misleading fees".
SWEEPING REVIEW
The reforms build on the watchdog's sweeping review of Britain's asset management sector published last June that found evidence of weak price competition.
The FCA also launched a further consultation on remedies related to funds providing better information about their products, covering how fund objectives can be expressed more clearly, and benchmarks used for tracking performance.
This would make life harder for so-called "closet trackers", or funds which say misleadingly they actively chose investments and therefore charge higher fees. Tracker funds which follow a benchmark, such as the FTSE 100 index, charge lower fees.
PwC's Strange said the proposals would force managers to be even more vigilant in how they use benchmarks in marketing materials and show fund performance when no benchmarks are used.
The FCA said the chair of an asset management firm's board will be directly accountable to regulators for assessing value for money and ensuring independent directors are appointed.
Asset managers will have a year to comply with changes to how they profit from investors buying and selling their funds, known as box profits, and with steps that make it easier for investors to shift into cheaper share classes, the FCA said.
Daniel Godfrey, the former CEO of the Investment Association who called for more transparency in the sector, said the changes should improve value for investors, and that the importance of forcing asset managers to be clearer on their use of benchmarks should not be underestimated.
Kevin Doran, chief investment officer at broker AJ Bell, said: "For far too long, many fund providers seem to have forgotten just whose money it is they manage, hiding behind vague objectives and excessive charges."
($1 = 0.7114 pounds)
(Additional reporting by Sinead Cruise; Editing by Jane Merriman and David Holmes)
By Huw Jones and Simon Jessop
