July's question for your Manager

12 July 2017

The Pensions and Lifetime Savings Association publishes topical questions to aid trustees in considering the effectiveness of their managers’ stewardship activity. We encourage funds to ask these questions during their regular manager reviews in an effort to understand their managers’ approaches and activities and to ensure that they are adhering to the stewardship policies.

TOPICAL QUESTION FOR YOUR MANAGER

Background: The final report of the FCA’s asset management market study highlights weak price competition and sustained levels of very high profits in the asset management industry, suggesting that asset managers often fail to control costs and deliver value for money for their clients, including pension funds. The study proposes a package of new reforms, including greater independent governance of investment funds and more detailed disclosure of costs accruing to clients.

Question: Why does the cost we pay for investment management represent value for money? How do you control costs and charges, such as transaction and research costs, and what governance measures do you have in place to ensure that your fund delivers value for money to clients?

Read previous questions here.