IC Select has developed a standard to improve transparency and consistency of performance information across the fiduciary management sector.
The standard, which will be launched by the end of the year, aims to put trustees in control of the fiduciary management information they receive, avoiding the potential for managers to cherry pick funds. It will provide them with performance data calculated on a consistent basis and presented in a standardised manner to improve their understanding.
A steering group headed up by IC Select has been established, made up of a selection of a cross-section of evaluation firms, independent trustee firms and legal representation.
The group held its inaugural meeting in March 2016 and is currently collating and analysing data from the fiduciary managers using the new standard.
This will determine the consistency of composite construction across the management firms.
Results from this analysis will be fed back to fiduciary managers to allow them to consider the construction of their composites. Following this process the managers will have the opportunity to amend their composites before re-submitting data based on their new composites. The performance data is expected to be available for use by trustees and third party evaluators later this year.
The analysis and details of the group participants will be announced at their next meeting towards the end of June.
IC Select managing director and steering group chair Peter Dorward said: "The standard may be refined over time but is very much as we expect it to be largely implemented.
"An overriding theme is how a trustee can look at a fiduciary manager and understands how that manager is performing, what makes them tick and what the end result of their performance may be. Here there has historically been a lack of transparency.
"Over the last two years or so we have developed a standard for fiduciary management performance reporting which has now got a steering group which oversees the standard and has now been bought into by the major fiduciary managers.
"This will resolve the issue of lack of transparency around the way they demonstrate their performance record but also how they calculate their performance when they're in a position of trying to pitch for business with a board of trustees."
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