The transparency code set up in June for the £217bn Local Government Pension Scheme (LGPS) is quickly gaining traction among asset managers, with the total number of signatories reaching 12.
The latest firms to commit to sending cost and charge data in a standardised format to their LGPS clients include Fidelity International and Investec Asset Management, which globally manage £234.2bn and £95bn of assets respectively.
Smaller asset managers have also come on board in the past month, including AGF, Capital International, Markham Rae, RWC Partners, and Trilogy Global Advisors.
Launched in June by the Scheme Advisory Board (SAB), the transparency code is aimed at helping LGPS funds get a better handle on their costs and fees, and obtain the necessary data in order to report costs transparently. It comes after funds encountered difficulties in getting such data from asset managers.
The new signatories join Legal & General Asset Management, which signed up in June and with a total of £894bn assets under management (AuM) is the biggest investment house to sign up to the code's principals. The first manager to commit was Baillie Gifford which has £158bn AuM, and was followed by Montanaro, Mondrian Investment Partners, and Majedie Asset Management.
While the code is only voluntary, it is hoped that as more asset managers will come on board, others will be under pressure to follow suit, and set a gold standard in cost transparency.
The code is specifically for the LGPS, but a very similar one has also been adopted by the Investment Association (IA) for its own updated disclosure code. The codes' templates are based on the cost disclosure model used in the Dutch market.
It comes as the Financial Conduct Authority (FCA) announced today it has appointed Chris Sier, who played a pivotal role in the creation of the LGPS code, to chair its working group on disclosure of costs and charges. Appointing an independent individual to the group was one of the watchdog's remedies following its final report on its asset management market study published in June.
The working group will comprise a range of industry and investor representatives, and will seek to agree a standardised disclosure template for ‘mainstream' asset management services, which builds on the work already done by the LGPS and the IA.
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