Statement Released by SCM Private in Response to The IMA’s belated Acceptance of Lack of Transparency in the UK Retail Investment Management Industry
SCM Private welcomes the IMA’s decision, following widespread pressure from advisers, MPs, fund managers and consumers to support the aims of the True and Fair Campaign, which is committed to being 100% transparent. The IMA’s belated decision to embrace the call for transparency of fees follows recent calls from CoFunds, the Association of Investment Companies, Skandia, BestInvest, Artemis, Fidelity, Legal and General and many others for change.
The investment trade body has said it is engaging with members on improving fee transparency which seems surprising when it has until recently denied there were any issues regarding the transparency of fees, pretended there were no hidden costs, and then blamed the situation on existing rules and regulations.
Gina Miller, founding partner, SCM Private said, “Whilst it may appear that the IMA has reluctantly bowed to pressure on fee disclosure, it is apparent that this important trade body has missed the significant issues being addressed by the True and Fair Campaign. Its offer to engage with members on improving fee transparency does not go far enough towards providing their customers with product information in a ‘consistent, unified and understandable format’ encompassing ALL costs and fees. There is also no discussion whatsoever regarding improved standards of transparency of investment holdings more regularly and on-line.
“We are concerned that the IMA’s approach will sadly lead to a continuation of the status quo and that would not be in the best interests of consumers. If the IMA accepts that the debate is truly about consumers’ best interests and that transparency is about more than just fees we invite it, the platforms and product providers to join us at a Roundtable on the 15 March to agree a simple, cost-effective, practical and workable solution.”
SCM Private has never suggested that transparency equates to low fees. But savers and investors have a right to expect to know where their money is being invested and to be able to make fully informed decisions before deciding whether to part with their hard-earned money. The True and Fair Code provides a simple universal label format which delivers this ease of use and transparency.
The True and Fair Code is proposing that consumers have full transparency, prior to purchase. Consumer research conducted on behalf of SCM Private has shown that with increased transparency and understanding:
- 63% of investors would save more
- 89% agreed that fund managers should disclose the full breakdown of fees
- 83% want to know exactly where their money is invested.
Posted By: True and Fair, 7:00 am