IA reveals challenges of latest sector shake-up
The Investment Association is still in talks with the industry over its sector consultation, as a conclusion has not been reached on outcome-oriented funds despite the consultation closing in April.
In February, the trade body launched a consultation to clear up confusion around outcome-oriented funds.
The industry trade body said there were now 200 funds in its IA ‘unclassified’ sector with an outcome focus, accounting for £30bn of assets.
However, the structure of the IA sectors has meant the outcome-focused funds have been consigned to the ‘unclassified’ sector, making comparisons between them difficult.
The original consultation offered three outcomes. However, due to a wide disparity in views and no clear direction of travel from respondents, there is no current timeline scheduled for a conclusion of the consultation.
Speaking to FTAdviser, Nicola Kembey, head of sectors at the IA, said: “What we try to do is obviously collate [responses] and try to take that back into our processes and try to work out how we are going to move forward.
“On that basis I think we are still very much in that process of engagement at the moment, I don’t think we have come to any clear conclusions.”
Galina Dimitrova, director of markets at the Investment Association, has said it has been “very difficult to pick a clear direction” adding that apart from the consultation process the organisation has engaged on a one on one basis with a number of institutions as well as IFAs and the private wealth management sector.
“No one conversation is comparable to the other, people have different opinions of where we should go…for us to come up with the right way to represent the industry a clear way has been very difficult identify.
“We hope to have a better idea of the direction to which we go soon but with some of the other things which we’ve discussed now a clear timeline has been impossible to determine and commit to.”
The consultation was launched as there was a trend towards growth in the outcome-focused funds area.
Ms Kembley said: “We’ve seen a lot of fund types being launched out there and they all have different names, multi-asset, risk targeted solutions, all sorts of things, and we were aware that our unclassified sector was beginning to see growth in those particular funds.
Ms Dimitrova also questioned whether the IA should “almost predict” what the future products will look like or do they leave a “scope for further development in the future” as the industry also develops.
“I think that’s a bit of a conundrum for us to resolve as we decide what is the direction we need to move this schematic towards.”
Ms Dimitrova added that the Investment Association needs to take into consideration what is out there at the moment and how adequately it can be captured with the organisation’s classification system.
“The outcome of the outcomes consultation will be really critical. Depending where we land on the three options there could be a lot more work.”
Ms Dimitrova added that the feedback received across the board was pretty even for all three outcomes and that was part of the difficulty in concluding the consultation.
ruth.gillbe@ft.com
