A platform to help pension funds collect and analyse cost data, such as transaction costs, has been launched by Chris Sier, who has played an integral role in the fight for transparency.
ClearGlass will assess costs reported under the new standardised templates prescribed by the Financial Conduct Authority's (FCA) Institutional Disclosure Working Group (IDWG) - of which Sier was independent chairman - and the fund managers' trade group, the Investment Association.
It comes after concerns that the extra cost and work involved in collecting and analysing transaction costs would not be worth the potential savings, as agreed by almost half of PP readers in a recent Pensions Buzz survey.
Taking heed of these concerns, Sier decided to develop a service for pension funds at lower cost than that offered by other providers.
The final IDWG templates, of which more details came out this week, were developed to improve the granularity of cost data reporting from asset managers to their institutional clients. As the templates are only voluntary, the onus is on pension schemes to ask asset managers to use the templates to report costs.
Sier, who has campaigned for cost transparency in investment management for almost a decade, believes cost data collection should not cost a lot.
The service will charge just £100 per mandate, which PP understands is far lower than what providers or advisers would charge, and Sier's aim is for it to become even cheaper over time.
ClearGlass aims to be the "low-cost data collection service for asset owners", aimed at all types and sizes of pension schemes.
Speaking to PP, he said: "I feel this huge responsibility on my shoulders which is I have put something into place which is a complicated rule and therefore it's complex and therefore it becomes a cost. Why should the process of collecting the data become costly?"
"The time has come for this. The asset managers accept it is right. As long as pension funds say they are going to use this, 90% of the asset managers will say they are going to. The same onus doesn't exist offshore. Where they are the pension fund, [I] adopt a progressive frame of mind on this."
For this to work, asset managers have to give data and pension funds have to ask for it, he said.
Separately in a statement today (9 November), he said: "We will make the complex simple, and with a low-cost model. We will collect and summarise cost data for schemes and provide an online tool that allows schemes to segment, analyse and compare their costs easily. By having a clearer understanding of the costs of using each asset manager, trustees will be able to make better decisions and will ultimately improve governance of the scheme. That will deliver a better outcome for scheme members."
The platform is an independent company wholly owned and set up by Sier and other employees.
The system will automatically validate the cost data, and is regulatory compliant with both the European Union's Markets and Financial Instruments and Packaged Retail and Insurance-based Investment Products directives.
Aon will provide start-up funding to help ClearGlass establish itself and to become a self-sustaining business.
McLagan (as a subsidiary of Aon) will receive access to the template data collected by ClearGlass so that it can provide benchmarking analysis of the fee and performance data as a value-added offering to both pension funds and asset managers. This service will be available to all participating pension funds through McLagan. Aon clients and non-Aon clients will receive access to the same data analysis, service and pricing.
Aon head of investment for UK and Ireland Tim Giles said: "We recognise that the ClearGlass offering provides clear benefits to pension schemes as it will allow them to make a better assessment of the cost of asset management. However, the service also offers benefits to the wider market - and Aon became involved because we are proud to be associated with a venture that helps not just our clients but the market as a whole including, of course, individual scheme members."
It comes as the Local Government Pension Scheme recently put a tender to market for bidders for a cost data collection utility.
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