View more on these topics

Investment Association under fire for axing regulatory unit

Exploding-Piggy-Bank-700.jpg

The Investment Association’s decision to disband its regulatory affairs unit has cast serious doubt over the trade body’s ability to influence policy at the highest level.

The IA has scrapped its regulatory affairs unit in an attempt to cut costs after three of its biggest members announced their decision to quit the trade body.

IA head of the regulatory affairs unit Richard Metcalfe has left as a result.

The decision has been criticised in some quarters of the industry.

A senior source in the asset management industry warns “the real danger” of disbanding the regulatory unit is the risk of losing influence at industry level.

He says: “We’ve got an avalanche of European legislation coming down the pike and if we don’t have cohesive representation we may not get at least some concessions.

“We’ve got the asset management review from FCA next year, so quite apart from the regulatory unit being shut down, the real danger here is we start to lose that participation at an industry level.”

The source adds firms threatening to leave the IA risk “destroying” the trade body.

Financial Inclusion Centre director and FCA board member Mick McAteer says: “The IA must have had a good reason to do this. It might have been to reduce costs or because members are leaving, so it could well be for internal organisation purposes.

“It is surprising as there is no question that regulation is going to be a priority for asset managers next year.”

gbi2 managing director Graham Bentley says the move could leave the IA without a voice to influence regulatory change both in the UK and Europe.

He adds: “You have to ask yourself whether the IA is going to engage with the regulator on behalf of fund groups or not.”

The decision follows a period of turmoil for the IA. High profile members Schroders, M&G and St James’s Place are set to quit the trade body at the end of this year, while Daniel Godfrey left his role as chief executive after a member revolt.

IA interim chief executive Guy Sears says the trade body’s regulatory activities will now be overseen by its “core” teams.

He says: “We believe that enabling our core teams, which cover the full range of investment areas, to oversee their own regulatory engagements will help us to deliver the highest quality of advocacy for our member firms, key stakeholders and the industry’s end-clients.”

Editor’s note: A version of this article appeared in the 10 December 2015 print edition of Money Marketing, with the headline “Disbanding regulatory unit ‘risks destroying IA’”. Money Marketing would like to apologise for the inaccuracy of this headline, and has amended the headline online accordingly.

Recommended

Govt ‘could strike deal with providers on exit fees’

The Government will pressure pension providers into cutting exit fees on legacy policies, experts predict. Speaking at Money Marketing’s Brave New World retirement conference in London last month, independent pensions commentator Alan Higham said the Government would be forced to act on early exit penalties following the FCA’s work on the issue. The FCA’s report, […]

FCA interior logo 620x430
3

FCA clarifies Sipp standard assets cap-ad stance

The FCA has given further clarity on which Sipp assets can be considered standard and non-standard, including commercial property and discretionary fund management portfolios. New capital adequacy rules due to take effect from September 2016 base solvency requirements on the proportion of standard and non-standard assets held by Sipp providers. Following consultation the regulator watered […]

Woodford-Neil-2014.jpg
1

Woodford hires ex-FBI agent to investigate £16m paper loss

Neil Woodford has hired a former FBI agent to investigate an American drugs developer after claims of financial irregularities pushed him to a $24m (£16m) paper loss. The Times reports that Woodford Investment Management has written to the board of Northwest Biotherapeutics calling on the company to appoint the ex-FBI agent as a non-executive director. […]

Japan Economic Insight

James Dowey, Chief Economist, and Paul Caruana-Galizia, Economist

The conventional wisdom is that following a roughly 50 per cent rise in the stock market in 2013 in Yen terms, the Japan trade is over and done*. So the story goes, those big gains were due to a one-off boost from quantitative easing (QE) and a depreciation of the Yen — policies that one should think of as a palliative to Japan’s economic weakness, but not a cure. Rather the cure, and by implication the necessary condition for a longer-term investment case, is deep structural reforms — a painstaking re-weaving of Japan’s economic and social fabric, no less. The story continues: this is a much tougher test than launching a blast of QE, and one that prime minister Shinzo Abe, although well intentioned and well supported by the public thus far, is likely to fail. Stick a fork in Japan, it’s done…continue reading

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment