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Fidelity, Aberdeen and Invesco could join IA exodus

Godfrey Daniel Investment Association 2015

Fidelity Investments, Aberdeen Asset Management and Invesco Perpetual are considering following M&G Investments and Schroders in leaving the Investment Association.

Yesterday, it was revealed the two managers are planning to quit the IA later this year when their membership expires.

Now Sky News reports Fidelity, which manages £184bn, and Aberdeen and Invesco are also considering whether to sever their links with the IA.

The IA’s non-executive directors are believed to be attending a scheduled meeting today where the membership crisis will be discussed.

Last month, Aegon quit the Association of British Insurers while L&G left in August 2014.

Yesterday, IA chief executive Daniel Godfrey said: “It would be incredibly disappointing to lose any member and we will do everything we can to convince anyone who is considering leaving to stay.

“Our very proactive strategy to help a great investment management industry make investment even better can be uncomfortable at times.

“But it is not only the right thing to do given the responsibility of managing other people’s money as their agents, it is essential in the post global financial crisis world if we are to maintain the right to have influence over our future regulatory and legislative environment.”

Aberdeen, Fidelity, M&G, Schroders and Invesco declined to comment.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Richard Philbin 6th October 2015 at 9:56 am

    It would be really interesting to know the reasons why these companies actually want to leave the association and why they all seem to be breaking cover all at the same time.

  2. What this article doesn’t say is why these firms are planning to leave and what Daniel Godfrey doesn’t say is why they should stay. Firms like these employ lots of very smart people and presumably consider that they’re quite capable of rowing their own boats without any input from the IA and without having to pay for it.

  3. ………“But it is not only the right thing to do given the responsibility of managing other people’s money as their agents, it is essential in the post global financial crisis world if we are to maintain the right to have influence over our future regulatory and legislative environment.” I think the rationale for leaving is in the last bit regarding influence over regs and legislative environment. This would be none then? The FCA and predecessors are not interested in what anyone except themselves have to say as they have their own agendas to stick to and it wouldn’t do letting the industry divert them from this. Why pay the IA fees to have no influence when you can pay no fees, lobby on your own, and have the same outcome? I don’t think it takes rocket science to work out

  4. It is unfortunate that those appearing to leave were notable for their absence from the list of signatories to the IA’s statement on “Customer First”. Perhaps they knew they were going to leave and hence abstained, or worse have decided that adopting the IA’s position on customer care is at odds with their belief that their important ‘clients’ are institutional and overseas, not UK retail.

    To dispel this those companies who have exited or intend to do so ( and other non-signatories) break their rather awkward silence and let us know their thinking…

  5. This makes intersting reading -Press Release – Immediate Release – 6 October 2015

    Big Brand UK Fund Companies Show Their True Anti-Consumer Colours

    Rebellion by members of the Investment Association (IA) began yesterday even though the measures proposed by the IA on increased transparency and improved consumer protection have been half-hearted.

    – Two large well-known consumer brands, M&G and Schroders are set to leave UK trade body in 2016. As at August 2015, these two companies represented 11% of UK retail investors’ funds.[1]

    – Three more well-known consumer brands, Aberdeen (includes Scottish Widows), Invesco Perpetual and Fidelity also reported[2] to be considering leaving the same UK trade body. These companies represent a further 18% of UK retail investors’ funds as at August 2015. 1

    – Reported reason for departures are:
    i) UK trade body had become “far too aggressive over reforms on the transparency of fund performance fees and transaction costs.” [3]
    ii) Dissatisfaction over UK trade body Statement of Principles, which outlined “behavioural standards such as the need for fund managers to put clients’ interests ahead of their own.”[4]

    It is an astonishing indictment of the UK fund management industry that even half way measures aimed at bringing in genuine transparency that would vastly improve consumer protection by investors knowing exactly what they are paying and where they are invested, are seemingly met with complete refusal by the big guns in this shoddy industry.

    As an example, the recent voluntary “improvement” to fund cost disclosure was set to be a number of different items, not even added up, shown within an annual statement few ever open, and completely missing key elements of cost.

    Even the Statement of Principles, recently put out by the Investment Association which aimed to relieve growing consumer criticism to the industry excesses was not supported, with some of the largest UK asset managers not signing up – Fidelity, Invesco Perpetual, Schroders and M&G.[5] Initially just 12.5% (25 out of 200) of the Investment Association’s members signed to this code.

    Gina Miller founder of the True and Fair Campaign and challenger brand SCM Direct said’ “It beggars belief that a non-legally binding statement of principles which simply contain practises which every other reputable non-investment firm carries out without hesitation, should be considered contentious”

    It is clear that many in the traditional UK fund management industry are not interested in promoting the best outcomes for its clients or putting customers first. These reported departures and associated explanations reveal a complete lack of any willingness to be opaque, let alone transparent.

    “In the past we have argued that the UK investment industry acts like a cartel and these moves add further weight to our argument.”

    “This should act as a final wake up call to the UK Regulator and the Treasury that they need to urgently act to reform this industry’s anti-consumer practises.”

    END

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