When you examine what now deposed Investment Association boss Daniel Godfrey was asking of members, it does not seem like that much of a stretch. The trade body’s apparently controversial statement of principles was a voluntary code of conduct where signatories pledged to, among other things, put clients’ interests first, take care of clients’ money diligently, only offer funds that add value and make all costs and charges transparent and understandable. It is the last point in particular, alongside the IA’s work on dealing commission and executive pay, that proved too much to bear.
IA chair Helena Morrissey is at pains to stress it was not what Godfrey was proposing, but the how, that caused members to be so vexed. I will let readers be the judge of that.
Since the IA crisis blew up, the trade body has been quick to push out a press release “reaffirming its commitment to transparency”. In the spirit of that transparency, Money Marketing has tried to speak to no less than 18 fund groups and providers about the fallout from Godfrey’s exit, the IA’s priorities and what its future agenda should look like. All either declined to comment or reverted to pre-prepared press statements. This includes interview requests with Godfrey, interim IA chief Guy Sears or anyone else from the IA.
It is understood M&G and Schroders signalled their intention to leave months ago, with other fund groups also unhappy with the direction of travel. No doubt there have been some difficult and uncomfortable board conversations over recent weeks and months.
As brand guru Lucian Camp points out, trade bodies have the unenviable task of pleasing all their members all of the time, while also assuming an acceptable public face in front of policymakers and consumers.
With so many different stances on key battlegrounds such as pricing and distribution, it is interesting to hear that increasingly the Government does not want to hear from a chaotic rabble but instead is seeking out views from individual big brands directly.
There is a chasm opening up among the provider lobby, not just at the IA but also for those breaking away from the Association of British Insurers.
It may be optimistic to suggest, but this may be the opportunity for advisers to fill the breach. In the context of designing an advice market that works better for consumers, the pushback on transparency may have ultimately weakened the fund groups’ hand.
Natalie Holt is editor of Money Marketing – follow her on Twitter here