Firing Line: Daniel Godfrey
Daniel Godfrey, chief executive of The Investment Association, is no stranger to being quizzed on some of the most pressing issues facing the investment management industry, but one question appeared to have him stumped.
“Who is a better footballer, Lionel Messi or Cristiano Ronaldo? That’s a difficult one. I’d rather have Messi on my team but you have to admire Ronaldo’s dedication to his trade,” the avid Arsenal fan said.
Mr Godfrey applies a similar level of dedication to his own trade. Having spent 11 years as director general of the Association of Investment Companies, he was appointed chief executive of the then Investment Management Association in December 2012.
He entered his role as the head of the trade body of investment seven months prior to the formation of the City’s watchdog, at a time of great regulatory upheaval.
“It is challenging, complicated and also stimulating,” Mr Godfrey said. “Trying to find solutions to problems can be quite good fun. Problems such as how do you work with regulation in a way which allows investment managers as much time as possible to deliver great service to their clients?”
Following its merger with the investment arm of ABI at the end of June 2014, Mr Godfrey’s organisation was renamed the Investment Management Association to reflect its wider remit as an enlarged organisation.
The union was created to give a strong new voice for the asset management industry as a whole.
Mr Godfrey said: “I am really pleased we were able to do that. It enables us to have a broader say in affairs in investment management, which covers research and analysis on behalf of our clients.”
About 12 ABI employees moved to the body’s offices in the City as part of the union.
Mr Godfrey added: “Everyone is getting along fine. I do not feel there has been a culture shock. Of course there are some differences in the way the two organisations do things.”
One of the biggest challenges facing the asset management industry is navigating intense regulatory changes, while ensuring that the best results are being delivered on the client’s behalf, Mr Godfrey said.
Issues over fund charges have remained high on the agenda in the past year, with the FCA threatening to clampdown on fund managers that routinely pass down the cost of research and dealing commissions to clients.
Last May, Mr Godfrey came out in support of the FCA’s proposals to require all public discussion and marketing materials referring to fund charges to use the ongoing charges figure rather than the better known annual management charge.
A month beforehand, he had proposed a new methodology for stating fund charges in a bid to curb alleged overcharging as well as to bolster transparency. The plan involves comprehensive disclosure of the total costs incurred over the fund’s financial year.
“It is about expressing costs in pounds and pence so that the client can see all the costings involved in one place and in an easy way to understand,” he said.
“We have been working hard to improve the meaning of transparency over cost. It is important, and of course this is our own initiative rather than a regulatory requirement.”
He believes that the adoption of this methodology will go some way in restoring the industry’s tarnished reputation, which has taken a battering following the malpractice which led up to 2008 financial crisis.
He added: “The industry works very hard to do a good job for its clients. As you can see from the sort of things we are doing around transparency we want to show that we put our clients first and do a decent job at that. Then reputation follows. It is not for us to tell people how they should view us.”
Heading a body which represents around 85 per cent of the UK’s investment management personnel – with members managing around £5 trillion of assets, accounting for 35 per cent of all the assets managed across Europe – is by no means an easy feat, but it is enjoyable nonetheless, according to Mr Godfrey.
He said The Investment Association currently received at least a hundred queries a week from investment managers asking for help on technical issues.
“The role has real inherent value. It makes me want to get up in the morning and go to work,” he said.
“The most enjoyable thing is the breadth of things we get involved in, and working with some very nice and very bright people in the industry and stakeholder groups. Most of all, I like how important the industry is to people, companies and the economy.”
What does the future hold for The Investment Association? “The biggest challenge is to cover the waterfront because there has been so much going on it is difficult to stay on top of a very broad agenda.
“We aim to deliver the investment returns that citizens need for their own financial security and standard of living, and to act as responsible stewards and ensure that we make the best investments on the clients’ behalf.”
Myron Jobson is features writer at Financial Adviser
Daniel Godfrey’s career ladder
October 2012 – Present
The Investment Association, chief executive
July 1998 – October 2009
The Association of Investment Companies, director general
November 2009 – February 2012
The Phoenix Group, communications director
February 1996 – October 2003
Personal Finance Education Group, chairman
January 2006 – April 2010
HM Treasury, financial services forum member
