Support for cost disclosure templates must be followed by help to make sense of the data, says Jonathan Stapleton.
The Cost Transparency Initiative's (CTI's) launch of a number of templates and guidance to help schemes deliver greater value for savers with enhanced disclosure of transaction cost information is a welcome move.
The templates - unveiled last week - will allow for the standardised reporting of costs and charges and covers the majority of asset classes and product types that a scheme uses.
The CTI expects asset managers to be in a position to use the new tools to report against December 2019 and April 2020 year ends.
The initiative - which has progressed the work that had been started by Chris Sier's Institutional Disclosure Working Group - will now push for widespread adoption of the templates over the next 12 months before reviewing the take-up in April 2020.
A number of pension funds - including the Railways Pension Scheme - have already committed to using the templates.
But, while the templates are voluntary, the government expects progress - and will consider taking action to improve the adoption of the templates should schemes fail to be sufficiently proactive.
As pensions and financial inclusion minister Guy Opperman explains: "The government will legislate robustly to make this happen if the industry does not resolve this on a voluntary basis at speed."
But adoption of the templates is only half the battle. The next step will be making sense of the mass of data that these templates are likely to produce. That the templates are in a machine-readable format will help here, as will the CTI's guidance, but many schemes will also need help from their advisers to fully understand the implications across their strategies.
The cost disclosure templates are a huge step forward for the industry. If support for them can be sustained, then it will be a prize worth having.
Jonathan Stapleton is editor of Professional Pensions
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