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Trade body proposes code for asset management charges disclosure

The Investment Association has launched a consultation on charges and transaction costs in the asset management industry.

An industry code has been proposed by the trade body as a framework for asset managers to disclose all charges and costs faced by clients, which will form the basis of information made available for retail investors and can be used directly by institutional clients.

The IA says: “The code is above all a mechanism to provide underlying information to allow anyone responsible for consumer disclosure to be able to access consistent data on which to run their delivery engine, whether a front line consumer document or an institutional report of the kind being developed for independent governance committees and pension fund trustees.”

The deadline for responses to the consultation is 19 May 2017. Following a review of the responses, the IA will publish a feedback statement and a final set of proposals in Q3 2017.

The IA proposes the FCA includes the code in its conduct of business rules, with the timings planned to align with the implementation of PRIIPs, MiFID II and the final rules for defined contribution workplace pensions.

IA director of public policy Jonathan Lipkin says: “The asset management industry is fully committed to transparency and recognises the need to provide clear disclosure of both charges and the transactions costs incurred as part of the investment process.

“The new code provides for the first time a common framework for enhanced disclosure across investment products and services. It is a major opportunity to consistently define and provide data on charges and transaction costs. This consultation is designed to encourage feedback from industry, consumer, Government and regulatory bodies on the proposed approach ahead of the Code’s final implementation and we welcome views from all stakeholders.”

Pensions and Lifetime Savings Association director of external affairs Graham Vidler says the PLSA welcomed the consultation.

He says: “The PLSA has always recognised the importance of understanding transaction costs in order to ensure value for money on behalf of scheme members, and it’s good to see the IA taking steps to standardise disclosure. We will respond to the consultation, with a focus on ensuring that the code permits consistency and comparability. We urge our members and the pensions industry as a whole to respond to this important consultation.”

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