CA Summit: DC consultants less trusting of fund managers following Daniel Godfrey exit

The Investment Association’s handling of the departure of its chief executive Daniel Godfrey has led almost four out of 10 advisers to be more mistrustful of the fund management industry’s attempts to improve charge transparency and trust. By Gill Wadsworth

In a vote at the Corporate Adviser summit today, 39 per cent of delegates, all very senior consultants and advisers in the DC industry, said they were more mistrustful of the fund management industry as a result of Godfrey’s departure. 61 per cent said it had not changed its view. None said it had increased trust levels.

The Investment Association published a statement confirming its commitment to transparency shortly after the vote took place.

Speaking at the summit Lane Clark & Peacock partner Andrew Cheseldine said: “It does feel tremendously like the Investment Association has shot itself in the foot and the industry has shot itself in the foot.”

Godfrey’s departure – officially by mutual consent following a board meeting this week – comes in the wake of discontent among IA members about the trade body’s stance on reforming performance fees and transaction charges.

Major players including Schroders and M&G, had reportedly threatened to leave the association over Godfrey’s position on improving transparency.

However Cheseldine says Godfrey’s departure leaves fund managers vulnerable to greater external interference from financial regulators and government since the association may no longer be leading the charge on reform.

“It is much more likely [following Godfrey’s departure] that government in general will say ‘do it this way, tough’. They [the Investment Association] have lost a voice at the table.”

Investment Association chari Helena Morrissey says:“The Association’s members have always been conscious of their responsibilities in looking after other people’s money and recent events should not put that in doubt. Nothing has changed our collective commitment to putting customers first and, as part of that, to effective, transparent and competitive delivery to the millions of savers who depend upon the services we provide. The Board reaffirms its commitment to supporting positive change in the interest of members’ clients. In particular, it will continue the work already done to ensure that consumers receive clear comparable information on which they can make good investment decisions.

“The issues some members have voiced have been about the scope of the Association’s agenda and the style and approach of engagement with members in recent years. Whilst our overall remit and focus remains on highlighting the important role that asset managers play in terms of addressing the pensions and savings needs of individuals, supporting the growth of companies and contributing to the UK economy; there is a need to consult on how the Association prioritises against a packed agenda for the industry. The results of this consultation will guide the new CEO, once appointed, and, in the meantime, the management team is focused on business as usual.

“The Board and the industry remain committed to the values captured in the Statement of Principles but we are listening to members with regard to how it is implemented. There is no intention to make any changes to the ongoing executive pay project.” 

 

Q. What effect has Daniel Godfrey’s departure from the Investment Association had on your perception of the fund management industry’s commitment to improving charge transparency and trust?

It has made me more mistrustful of the fund management industry 39%

It has made me less mistrustful of the fund management industry 0%

No change 61%