UK - The UK asset management industry is unprepared for the implementation of the Alternative Investment Fund Managers (AIFM) directive, with only 2% saying they know how to implement the changes, according to a study conducted by PwC.

Additionally, more than half of respondents were concerned that the directive, which is awaiting final approval at a plenary session of the European Parliament next Thursday, would reduce their profit margin.

Of the 186 asset managers questioned, 41% were also concerned that the new EU regulation would lead to increased management fees.

However, only 16% have set up working groups to consider the implications of the changes and how to implement them.

James Greig, partner at PwC Legal, said asset managers would have to step up their responses significantly now that the directive was a reality.

"The transition from education to analysis and adaption can be a long and complicated pathway, and firms are leaving themselves an awful lot to address in an even shorter timeframe than expected," he said.

"The lack of concrete plans is even more surprising given the high percentage of managers who think the AIFM will result in increased management fees and a reduction in their profitability."

In other news, Aviva has announced the closure of its final salary pension scheme in a cost-cutting measure that will see the company save £275m.

Starting next April, the company's staff will be enrolled in a new defined contribution scheme, which will save the insurer £50m in future funding costs.

Aviva said the closure of the scheme to future accrual would help cut its predicted pension deficit.

It added: "We have reached agreement with the pension scheme trustees to close the final salary sections of the Aviva and RAC pension schemes to future accrual with effect from 1 April 2011.

"This will bring greater equality to our UK staff pension arrangements and reduce the funding volatility."

The company reported its net asset value increased to 424p per share at the end of September, up from 394p in June. It attributed 10p of this rise to the scheme closure.

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