Pension scheme investment decision-makers are most worried about a lack of cost efficiencies and transparency in the asset management industry, according to latest research.
More than four in five (83%) said they were nervous about cost efficiencies, while another 77% raised concerns about a lack of transparency in the funds they choose to invest in, Willis Towers Watson's Asset Management Exchange (AMX) found.
In a survey of 200 pension individuals with investment responsibilities, another 74% said they were worried about time wastage.
Global head Oliver Jaegemann said the findings demonstrate a need for a technological revolution in the asset management industry.
"These concerns surrounding costs, time and transparency come as no surprise to us," he said. "The investment management industry model is completely outdated. When compared to the rate of technological change in other industries, the institutional investment industry has been virtually stagnant over the last decade.
"It is clear that an industry transformation is long overdue."
Another 26% of respondents said they were not confident about the level of transparency regarding managers' operational costs.
A number of initiatives are underway to help schemes and members understand the level of costs associated with their investment products. Earlier this year, the European Union's (EU) revised Markets in Financial Instruments Directive (MiFID II) took effect requiring asset managers to disclosure aggregated costs to clients, while the Financial Conduct Authority (FCA) has also mandated disclosure from defined contribution (DC) schemes.
An FCA working group, which convened last September, has also proposed five cost disclosure templates to the watchdog. These will be published for voluntary adoption later this year.
Over nine in 10 respondents said fees were important when considering an active asset manager, while another 85% and 84% named the manager's reputation and the product's past performance.
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