Colin Musgreaves tackles the issues of transparency within the investment industry.
I was recently recommended to watch the Wolf of Wall Street by a partner in a major city law firm, who assured me I would enjoy it.
He was right, what a fantastic film. When it was over, in a moment of reflection, it made me think about the parallels with our industry, and, if it was based on a true story, how things are so very different for retail and institutional investors in the UK.
The current FCA Study into Asset Managers & Investment Consultants (November 2015) together with the requirement to disclose transaction costs, has formed the basis of much debate in the industry.
This is indicative of a wider drive for increased transparency to secure the best possible outcomes for pension scheme members at the most efficient cost. The paper suggests a firmer focus on value, influence and conflict control to improve member outcomes.
This investigation is certainly concentrating the minds of the asset management industry and consultants and much constructive effort is being directed towards completing the returns.
Further news is expected in late summer, with an outcome planned for early next year. We can't be sure what the result will be, but a self-regulatory approach may be one possible solution.
This certainly appears to be working in the contract-based DC market, with IGCs beginning to prove their worth although, admittedly, these are early days.
Whether this will go far enough is open to debate.
Some further process or approach may be more appropriate to satisfy clients that the industry is transparent, well-governed and does its absolute best to deliver good value.
Thankfully, I have yet to see any evidence of Hollywood headlines such as wild parties, unconstrained exuberance and high fives.
Maybe, these are just fiction and belong on a film set. One thing is certain, London is a world leader for financial services and asset management and we should all work together with the regulators to set high standards and make sure we reach them.
Written by Colin Musgreaves, Business Development Director, PTL.
