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Local authorities pension charges statement

Commenting on the FT investigation which reveals a huge disparity in fees paid by local authorities for pension schemes, Gina Miller, founder of The True and Fair Campaign and the recently launched trueandfaircalculator.com website, said:

“Investment and pension fund management fees are a national scandal and it is no surprise to read that some local authorities are paying up to three-times more in charges than others for similarly sized pension funds.

Posted By: True and Fair, 7:35 pm

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Statement on The FCA’s annual risk outlet

Commenting on The FCA’s annual risk outlet and its statement that it has concerns about the use of ‘complex charging structures’ for long-term investment and pension products, Gina Miller, founder of the True and Fair campaign and co-founder of SCM Private said:

“We are delighted the Financial Conduct Authority (FCA) has acknowledged that ‘complex charging structures’ in the investment and pensions industry are an issue that needs to addressed, and which it will look into as part of its 2013 / 2014 plan.

Posted By: True and Fair, 5:16 pm

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True and Fair Campaign wins MEP’s support for introduction of EU online savings calculator

Concept of online savings calculator to be discussed by European Parliament’s Economic and Monetary Affairs Committee

The True and Fair Campaign (www.trueandfaircampaign.com), which was initiated just over a year ago by British investment manager SCM Private (‘SCM’), has welcomed two amendments to the European Commission’s proposal for regulation on a new Key Information Document.

The amendments were tabled by Sharon Bowles MEP, UK Liberal Democrat and Chairman of the European Parliament’s Economic and Monetary Affairs Committee, and are designed to call on the European Securities and Markets Authority (ESMA) to introduce an online financial calculator.

The True and Fair Campaign has been calling on UK and European politicians, regulators and fund providers to introduce a new labelling system that will give consumers 100% transparency on all transaction costs and management fees and full disclosure on where funds are invested. It believes that an online savings calculator will allow investors to check fees and costs, in percentages and monetary amounts, and to directly compare products between fund providers.

Sharon Bowles MEP, UK Liberal Democrat said, “I am very keen to ensure the highest level of investor protection for European consumers and the full transparency of costs. The introduction of an online fund calculator at European level is a very interesting and thought-provoking idea as it would allow investors to check for themselves, and to directly compare, the information which is provided to them by fund managers. I have tabled amendments on this topic to ensure we will have a thorough debate on it in our Parliamentary committee.”

Posted By: True and Fair, 1:47 pm

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Renaming of Absolute Return Sector an Absolute Farce

Commenting on the IMA’s review of the Absolute Return Sector Gina Miller, founder of the True and Fair campaign and co-founder of SCM Private said:

“It has taken the IMA nearly two years (643 days – 26th May 2011 to 27th February 2013) to come up with a single word – targeted. So now the ‘absolute return sector’ will become the ‘targeted absolute return sector.’

Under the new definition ‘Funds in this sector may aim to achieve a return that is more demanding than a “greater than zero after fees” objective.’ Is there much point in a fund not aiming to deliver positive returns?

Posted By: True and Fair, 5:43 pm

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Commenting on IMA Director of Public Policy, Jonathan Lipkin’s, statement that pension charges need to be made simple and transparent to ensure employees do not opt out of auto-enrolment, Gina Miller founder of the True and Fair Campaign said:

We welcome Jonathan Lipkin’s statement that pension charges should be made simple and transparent, something The True and Fair Campaign has been very vocal about for the past year, however the IMA’s belated Damascene conversion needs to be backed by action.

“While it is encouraging to see that the IMA, under new leadership, is recognising that fund fees and charges need to be revealed upfront to investors, nothing has changed as far as consumers are concerned and identifying the cost of pension and investment products remains an all but impossible task.

“Nothing short of 100 per cent transparency on all fees and costs, through one single number, in pounds and pence is acceptable.

“In the face of continuing industry inertia, we believe that statutory regulation is the only solution to protect consumers. If the IMA truly believes in transparency we believe they should back statutory regulation to force 100 per cent disclosure on all fund fees and costs as the only fair way to create a transparent, level-playing field for consumers and the financial services industry.

Posted By: True and Fair, 4:59 pm

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Commenting on F&C’s decision to levy a new annual charge on investors in its equity-based Child Trust Fund (‘CTF’), Gina Miller founder of the True and Fair Campaign said:

This is another example of the UK investment management industry acting in a shamelessly anti-consumer and opaque manner. It’s totally wrong that children are locked into expensive and poorly performing funds and that the only alternative is to switch to another CTF provider, which may face the same problems.

“One of the overriding principles of the FSA is supposed to be ‘treating customers fairly’. Surely, this is a perfect opportunity for the new FCA to rule that there is a default index or tracker product that customers can switch into, and that this cost is borne by existing providers?

“This is a major embarrassment for our industry and there should be immediate steps by policy makers and regulators to remedy the situation before we lose another generation of investors. Failure to do so will be acting against the consumer interest and will further undermine trust in the financial services industry.

“The Government needs to undo its policy and the FSA/FCA should make providers who are not able to deliver on their commitment return the money to investors or set up a structure for all the orphan money to be managed effectively and cost efficiently.”

The True and Fair Campaign (www.trueandfaircampaign.com) continues to call for all fund fees and costs to be disclosed, with 100% of the costs reported through a single number, via a common format used across the fund management industry. That way, savers will be able to genuinely compare performance and charges between different funds.

Gina Miller has children who have CTFs, and believes that children should not be subject to higher-level fund charges for CTF funds.

Posted By: True and Fair, 4:57 pm

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True and fair Campaign Anniversary Press Release. 5th February 2013

Savers and pensioners demand statutory regulation to force disclosure of all fund fees and costs

- Savers want full disclosure of ALL investment fees and charges
- More than 90 per cent of investors believe legislation is necessary to force transparency
- True and Fair Campaign calls on regulators to guarantee investor confidence

An overwhelming majority of Britain’s savers and investors want full disclosure of the investment fees and charges levied by investment companies with more than 90 per cent (92%) saying that firms should be legally obliged to provide this information, according to a new report from The True and Fair Campaign. ¹

The report marks one year since the launch of The True and Fair Campaign (www.trueandfaircampaign.com), which continues to call for a fair and transparent deal for consumers, and demonstrates just how important the issues of transparency and fee disclosure are.

Almost three quarters (74%), of investors questioned said they wanted costs and fees disclosed as a single, cash figure – something The True and Fair Campaign has been urging as a bench-mark to enable simple comparisons between financial savings and investment products.

The findings also highlight the value savers place on understanding what they are paying for. More than 80 per cent (84 %) of those polled said that it is very important they understand the fees they pay for investment or pension products, and yet more than half (58%) said they did not know the cost of their current products, including fees.

For any further enquires please email: gina@scmprivate.com

Posted By: True and Fair, 5:32 pm

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Response to IMA comments on True and Fair Campaign

Commenting on media reports that the IMA’s new CEO Daniel Godfrey has said he does not agree that savers ‘should have an annual statement telling them the cost of investments in pounds, shillings and pence’ and that he favours retaining Total Expense Ratios, Gina Miller, founder of The True and Fair Campaign stated:

We are deeply disappointed to see these comments from Daniel Godfrey as we had hoped that the IMA was going to live up to its bold promise to work to promote greater transparency on costs and charges and build new industry-consensus and standards on disclosure.

These appear to have been empty promises from an utterly discredited industry-body that remains focused on its own survival and the interests of its members, not on driving higher standards and protecting the needs of ordinary savers and investors. The IMA repeatedly fails in its stated purpose “to improve the financial outcomes for customers – savers and investors.”

While Daniel Godfrey and the IMA may not welcome giving consumers a figure showing what they pay in fund fees and costs, in pounds and pence, savers themselves are crying out for this transparency, with research we commissioned showing that 89% of savers want disclosure and a full breakdown on fees.

Giving the clear total cost of investment figure in one number, a True Cost of Investing figure, in one place, is surely a fundamental and legitimate expectation for modern investors? The IMA continues to live in the past.  It is imperative that consumers are given this fundamental right so they can regain trust in the savings and investment industry and stop the savings gap which hurts the social and economic future of our society.’

Posted By: True and Fair, 7:05 pm

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True and Fair Campaign calls on FCA to implement ‘Six Point Plan’ to ensure RDR restores consumer protection and confidence

Gina Miller, who spearheads the True and Fair Campaign (www.trueandfaircampaign.com) has called on the Financial Conduct Authority (‘FCA’) to urgently address six core tasks to ensure that the forthcoming Retail Distribution Review (‘RDR’) does not fail in its stated intention to promote better consumer protection and restore trust in financial services.
The True and Fair Campaign’s Six Point Plan is:

1. FCA should demonstrate it is not a prisoner of the industry – stop delegating key powers to the investment trade bodies; strong regulation and statutory rules are critical
2. 100% transparency on charges and investments, policed by the FCA, with legal force. Voluntary codes do not work
3. A Code of Ethics – with those who act against consumer interests: named, shamed and prosecuted (if needed)
4. Regulation focused on reducing conflicts of interest, increasing competition, transparency and therefore overall trust
5. FCA to enact wide-spread communication with industry prior to regulation to ensure it is clear, logical and effective
6. Every key FCA decision judged not in isolation but in overall context to ensure consumer is better off

Gina Miller, co-founder of SCM Private and spearheaded of the True and Fair Campaign said, “Like so many others, we believe there are a number of issues associated with RDR that need urgent examination before 1 January 2013, which is why we have outlined this six point plan. Whilst we welcome Martin Wheatley’s intention to address issues such as transparency on costs and charging, we really need to engage with consumers and ensure they understand all the confusing rhetoric.

“Unless steps are taken to strengthen regulation, commit to 100% transparency on charges and holdings, and devise a Code of Ethics, there is a real risk that RDR could in fact kill mainstream financial advice rather than being a much-needed silver bullet. RDR could potentially result in millions of savers being denied independent advice by the very regulation which was meant to open it up for them. Many will be forced to invest via execution only platforms, frequently characterised by conflicts of interest where fund managers pay the platforms for ‘shelf space’, and where the recommendations frequently mislead consumers into believing they are receiving unbiased and independent advice.”

The True and Fair Campaign advocates that transparency, rather than just low fees is the key to better consumer protection. And that ALL fees should be published in ONE ticket price number. The True and Fair Label incorporates all costs – fund managers, platforms, advisers and also takes into account rebates or revenue from stock lending so for the first time consumers will be able to see the likely costs of investments and be able to make fully informed choices.

Posted By: True and Fair, 3:36 pm

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Association of Investment Companies (AIC) comment

Commenting on the decision by the Association of Investment Companies (‘AIC’) calling on its members to consider publishing full portfolio details after RDR is implemented in January 2013, Gina Miller who spearheads the True and Fair Campaign (www.trueandfaircampaign.com) said:

“We are delighted that the AIC has chosen to closely follow the full recommendations of the True and Fair Campaign published in January this year in having proper 100% disclosure of holdings, preferably monthly but at least quarterly with a maximum 3 month delay. In January 2012 the True and Fair Campaign recommended that the UK industry publish 100% of holdings at least quarterly. This was met with derision by some of the same fund management companies in the UK who have been allowing their US clients precisely this level of transparency for years.”

“It is an absolute scandal that until now neither the UK investment industry nor the UK regulator has even considered this for ALL funds when this has been the law in the US since 2004. Back then, the Securities and Exchange Commission (‘SEC’) adopted several amendments to its rules and forms intended ‘to improve significantly the periodic disclosure that mutual funds and other registered management investment companies provide to their shareholders about their costs, portfolio investments, and performance’. It’s time the UK regulator and the wider UK investment industry wholeheartedly support transparency not through empty rhetoric but through firm actions; as a matter of urgency.”

“There is simply no excuse for the rest of the fund management industry, and the IMA in particular, not to modernise and improve, just because their regulator has not insisted on the higher standards being required in the UK. If the old traditional industry of investment trusts can do it, why can’t they? The two tier system for UK investors must stop, whereby US fund management companies are forced to operate by far higher standards for their US customers than their UK customers.”

“Rather than continue to bury their heads in the sand, hoping the issues will go away, all trade bodies involved in the savings, investment and pensions industry should come together with the FSA/FCA to now put in firm, enforceable, and workable solutions for genuine transparency of fees and holdings that will improve consumer protection and the reputation of the industry. This should take place after proper consultation with all stakeholders, rather than closing ranks and continuing to defend the indefensible.”

Posted By: True and Fair, 7:56 pm

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