25 fund managers sign transparency pledge

Twenty-five fund managers out of the Investment Association’s membership of 200 have signed up to a pledge to put customers first.

The 25 fund managers have all signed the IA’s Statement of Principles, which sees them make a public commitment always to put clients’ interests first and ahead of their own.

The Statement of Principles is designed to offer fund managers an industry wide route to demonstrating the transparency in the way they conduct business. It has come against a backdrop of rising concern amongst the FCA, politicians and advisers at perceived opacity in the way asset management transactions are conducted and  charges are reported as well as fears that customer and fund manager interests are not always aligned.

But several high profile firms have declined or refused to sign up to the Statement of Principles. Big name managers such as Standard Life Investments, Fidelity Worldwide Investments, Aviva Investors and Dimensional, as well as scores of other firms have not signed the pledge.    

The fund manager signatories to the statement, covering 34 per cent of the industry and holding £1.8 trillion in assets under management, have promised by the end of the year to publish a statement in plain English on their websites explaining how they put the Statement of Principles at the heart of their organisations and how they identify and deal with any issues that could compromise their ability to uphold them. They will then report annually on their success in applying them.

IA chair Helena Morrissey says: “The industry is being asked to deliver lifelong financial well-being. We can only do that if clients can trust us to put their interests first and ahead of our own. The Investment Association Board approved these principles to make it easy for clients to see how their investment manager earns that trust.”

IA chief executive Daniel Godfrey says: “Those who have committed to the Principles so far manage from under £50 million to more than £750 billion from the UK. Some are foreign-owned, others UK. Some are insurance company or bank-owned, some are independent. But what brings them all together is the depth of their commitment to their customers.

“I am hugely encouraged that the Principles have got off to such a strong start.”

LCP partner Andy Cheseldine says: ”This is a good initiative. Principles 3, 5 and 6 are particularly interesting – the trick will be challenging these organisations if they do not do what they say they are going to. What is the sanction if they don’t?” 

A spokesperson for Fidelity says: “The Principles embody a range of business principles and practices which Fidelity takes very seriously. However, Fidelity is not just an asset manager but also a pension provider and manages a large platform. The client needs differ and cannot be covered by a single statement. We feel that the message of the principles is clear from our current communications and actions with clients, and that a further overlay could not be justified. In particular we believe we are leaders in the area of stewardship. We have been a leading advocate of remuneration being aligned with long-term goals. We will shortly be offering clients a clear statement of our own remuneration practices which we believe aligns our behaviours with their best interests. Of course we’ll keep listening to our clients and see the principles they value, so we’ll keep this under review.”

Standard Life Investments declined to comment on why it would not sign the statement.

What signatories say they will do: 

1 – Always put their clients’ interests first and ahead of their own

2 – Take care of clients’ money as diligently as they would their own

3 – Only develop, offer and maintain funds and services designed to add value for clients and help them achieve their financial goals

4 – Maintain and apply the investment and operational expertise needed to meet the objectives agreed with clients

5 – Make all costs and charges transparent and understandable

6 – Disclose to investors the source and value of any other material benefit they receive as a consequence of their role as investment manager

7 – Ensure regular, timely and clear lines of communication with clients

8 – Set out clearly their approach to the stewardship of client assets and interests

9 – Maintain a corporate culture that sustains these principles

10 – Work with industry colleagues and stakeholders to develop and maintain guidance on industry best practice

Full list of signatories

Alliance Trust Investments   Newton Investment Management

AXA Investment Managers UK

Old Mutual Global Investors

Baillie Gifford & Co

Rathbone Unit Trust Management

BlackRock Investment Management (UK)

Record Currency Management

City of London Investment Management

Royal London Asset Management

EdenTree Investment Management

Seneca Investment Managers

Henderson Global Investors


Hermes Investment Management

Skagen AS

HSBC Global Asset Management (UK)

Smith & Williamson Investment Management

Kames Capital

T. Bailey Asset Management

Legal & General Investment Management

TwentyFour Asset Management

Liontrust Asset Management

Vanguard Asset Management

Majedie Asset Management