Fund houses asked to sign up to ‘statement of principles’

Fund houses asked to sign up to ‘statement of principles’

The investment industry trade body has launched a ‘statement of principles’ to encourage asset management firms to focus on putting clients first.

The Investment Association (IA) said the statement of principles “goes further than the regulatory requirement of ‘treating customers fairly’ and expresses the core principle that investment managers ‘always put clients’ interests first and ahead of our own’”.

The 10 principles include pledges to be transparent on costs, to only develop and offer funds that add value for clients and to manage the money of clients as diligently as they would their own money.

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Asset managers who choose to sign up to the statement will be displayed on the IA’s website from July 31.

The asset managers who sign up will be required to “describe publicly their approach to maintaining the principles and how they identify and deal with the key issues that could compromise their ability to maintain alignment”.

These statements from the asset managers will be included on the IA site from the start of 2016 and the firms will have to confirm annually how they are adhering to the principles.

The IA said it would review the statement of principles in 2017, “considering uptake, impact and feedback from all stakeholders”.

The initiative from the IA comes as the asset management industry has come under increasing regulatory pressure as its influence grows; the industry now manages more than £5trn in assets.

The FCA has announced that it will be conducting a market review of the industry, either in late 2015 or 2016, though it has not yet revealed the full scope of the review.