View more on these topics

Daniel Godfrey: Asset managers must address opaque pricing

Godfrey-Daniel-Investment-Association-2015

Asset managers need to give investors a single price for investment products separate from trading costs to boost transparency, says former Investment Association chief Daniel Godfrey.

Speaking at the Transparency Symposium, Godfrey, who is currently non-executive director of Big Issue Invest Fund Management, says asset managers can use transparency around charges as a competitive advantage.

He says: “Transparency is an absolute requirement to build trust and it is a source for competitive advantage.

“We need more transparency in the difference between explicit and implicit costs so a consumer can see the difference between costs paid to professional agencies to manage portfolios and the costs of doing it themselves.

“I think agencies should have a single charge expressed in a percentage including the research costs and taxes but separate from trading costs so consumers can make an informed choice on the providers.”

Godfrey says a lot remains to be done to increase transparency and trust in the asset management industry.

“It is difficult to go through the accountability of a fund and understand the costs. At the moment it is difficult for consumers and authorities to trust providers.”

Godfrey had pushed for more transparency on fees while at the helm of the Investment Association, through the Statement of Principles.

However, the Investment Association has since pushed back the deadline indefinitely for member firms to sign the statement, after asset manager voiced concerns.

Godfrey says transparency in asset management is essential, but it is not enough to build consumer trust.

He says: “Whilst transparency is absolutely a necessary condition to build trust it is not sufficient in itself. It is one element but not the only one.”

He adds asset managers have the responsibility to use their “skills, knowledge and experience to deliver that mandate at the lower possible cost.”

Recommended

1

Investment trade bodies yet to plan for Brexit

Two major investment trade bodies say they have yet to formulate contingency plans in the event of the UK voting to leave the EU. At a Treasury committee meeting this week Conservative MPs Mark Garnier and Andrew Tyrie quizzed the Investment Association and the Wealth Management Association on their respective plans. WMA deputy chief executive […]

UK-Currency-Money-Notes-20-GBP-700x450.jpg
1

Investment Association hikes membership fees

The Investment Association has raised fees for small member firms to cope with the “considerable increase in regulatory and lobbying costs”. The trade body, which recently disbanded its regulatory affairs unit to cut costs, has written to a number of its members to explain the fee move, which will apply to both full and sector members. An Investment […]

UK-Currency-Money-Coin-Pounds-GBP-700x450.jpg

UK retail funds reach record £871bn

Assets in investment funds have reached a record high of £871bn in 2015 despite ongoing market turmoil, according to the latest figures form the Investment Association. Funds under management have increased by £36bn from 2014, although net retail sales dropped £4bn year-on-year to £17.6bn in 2015. Investment Association interim chief executive Guy Sears says: “Despite market uncertainty surrounding China, […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment