IMA outlines trading cost disclosure for members
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In focus: Question of Trust
The guidance, to advise members on disclosing trading costs, is aimed at addressing the concerns of a growing number of advisers and IMA members about the clarity to consumers of costs associated with trading.
According to Richard Saunders, outgoing chief executive of the IMA, the guidance will boost transparency and avoid misleading investors.
Gina Miller, co-founder of SCM Private and driver of the True and Fair Campaign on costs, said: “We welcome the IMA’s move towards consumer protection by encouraging its members to operate greater cost transparency.
“However this is a missed opportunity as the IMA is not advocating total transparency. Only showing part of the previously hidden dealing costs is still misleading and condones the self-serving behaviour of some of its members.
“In our opinion consumers deserve nothing less than the core principals of the True and Fair code, that calls for 100 per cent transparency with respect to fees and holdings. Consumers also have the right to know the full cost before they purchase and the right to know exactly where their money is invested once they become a client.”
Shane Mullins, managing director of Nottinghamshire-based Fiscal Engineers and driver of the Financial Adviser/Fiscal Engineers Question of Trust campaign, said: “I have to agree that transparency is absolutely fundamental and in an age where returns are difficult to capture it is important to focus on what you can control, and that is costs.
“I concur with Ms Miller. While I welcome any initiative that will increase transparency, I believe a half truth can be the same as a whole lie. More and full disclosure is appropriate.”