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The clear cost of investment

June 16, 2019 | Pensions
The clear cost of investment

As the FCA asks schemes to name and shame opaque managers, how do transparent disclosures move from compliance into meaningful action?

Obscuring investment costs is becoming a risky game for the asset management industry, and Dr Chris Sier knows it.

Now several months into a commercial cost-gathering venture with Clearglass, the long-time transparency campaigner and chair of the Financial Conduct Authority’s institutional disclosure group is using his regulatory contacts as an added weapon in his armoury.

Constrained by confidentiality from reporting recalcitrant fund houses to the FCA himself, he says regulatory executives have instead asked directly for trustees to name and shame the “less than 10 per cent of the asset managers who just say no” to requests to supply cost data.

“I spoke to the FCA and they have asked me, ‘Will you tell us who the managers are that are not giving data’,” he says. “I can’t do that… but I know who can give them that and that’s the clients.”

From there, the FCA’s approach seems to rely more on soft persuasion than any hardened regulatory threat. But this could be about to change, if pensions and financial inclusion minister Guy Opperman gets his way....

 

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