Labour has attacked the fund management industry claiming it has forced out Investment Association chief executive Daniel Godfrey.
Nick Thomas-Symonds, Labour’s shadow pension minister, believes members coerced Godfrey out of his position as a result of him pushing too hard on a number of issues including costs.
The former chief executive recently failed to get universal agreement from the trade body’s members on a Statement of Principles that stated they would put their customers first and be more upfront on charges.
Speaking to The Financial Times, a senior fund manager said: “He [Godfrey] launched initiatives on transparency of fees and fund performance and remuneration, which are all important, but there are other bigger issues out there that matter to our institutional clients, such as the pensions time bomb.”
Thomas-Symonds says: “The news that Daniel Godfrey is standing down after failing to reach agreement over publication of costs shows that it is now clear not all fund managers will sign up to a voluntarily agreement. So it is up to the regulator and the government to set rules ensuring that consumers get full and straight forward disclosure of investment costs.
“Labour will be working hard to ensure that pensioners and people saving for later life are properly protected. We need to make sure that when people take out policies they are in full position of the facts.”
ShareAction, a lobby group for responsible investing, has also questioned Investment Association members’ motivations.
Chief executive Catherine Howarth says: “The resignation of Daniel Godfrey is troubling, coming as it does hot on the heels of a number of fund managers talking about leaving the Investment Association. As none of these organisations have yet to sign the organisation’s new principles, there will obviously be questions about whether Mr Godfrey was pushed out for his attempts to lead much needed change.
“Some fund managers have been quoted, albeit anonymously, as saying that the Investment Association doesn’t represent the industry’s best interests. Ordinary savers will rightly want to know why asking fund managers to commit to transparency and aligning their interests with those of consumers is against the industry’s best interests.
“People would be forgiven for concluding that the industry is determined to put its own interests ahead of the savers whose money they are entrusted with.”
Following the threat of a mass-exodus of members, on Wednesday the trade body confirmed that Godfrey was leaving his role with immediate effect.
Fund management giants M&G and Schroders both stated earlier this week that they were planning to leave the organisation, while a flood of other firms including Invesco Perpetual, Aberdeen Asset Management, Fidelity Investments, Neptune Investment Management and JP Morgan Asset Management were also rumoured to be eyeing the exit.
The IA’s work on its Statement of Principles, released earlier this year, laid out a code of conduct for fund managers to adhere to, including that they would make all costs and charges transparent.
None of the fund management groups understood to be leaving or considering their membership were on the list of signatories to the statement when it was released. Just 25 groups signed up, while the association also came under fire from its members after bringing out new fund charge disclosure proposals earlier this year.