Giving a keynote speech at the Corporate Adviser 2018 summit, Chris Sier, chair of the FCA Institutional Disclosure Working Group, revealed that trade bodies for both these sectors had voluntary provided templates for greater cost disclosure.
This could help pave the way for many DC scheme to include assets like private equity within their default schemes, he says.
“The private equity trade body appears to be looking to improve the image of this sector and greater disclosure on costs is one way to do this.”
The templates provided by both trade bodies detailed a full range of costs and were “fit for purpose” Sier said. They have consequently been approved by this FCA working group.
As chair of this working group Sier has worked on a number of disclosure templates which he hopes will be used by trustee to collect information on pension costs.
As he pointed out this has involved considerable negotiation with asset providers, trustees and other interested parties to reach consensus on best practice guidelines.
He says the FCA is due to release these templates shortly.
Sier says: “The tide has turned as a result of this project. There is an acceptance from asset managers and other suppliers that this disclosure ought to be done. The message has been reinforced that not only is this important, but it can be a good thing for the asset management industry, and can help managers differentiate themselves.”
Sier says the biggest challenge is now to convince institutional investors and trustee to use this data.
“This is a clear recommendation on best practice, with consensus from the industry.” He adds that if trustees aren’t asking for and evaluating this data then questions will be asked as to whether they are doing their job properly.
He adds: “If there is widespread non-adoption, then the FCA will get involved.
Sier has been campaigning for 10 years for better transparency and full disclosure of costs within the pension and asset management industry.
