It can have escaped no one in the investment industry that the spotlight is firmly upon us. Regulators, shareholders and investors are scrutinising us as never before.
Fees, executive pay, operational transparency, performance – in every department, we are being asked to account for ourselves. That scrutiny can sometimes be onerous, but we should all welcome it for the opportunity it gives our industry to demonstrate that investment professionals are delivering value for clients.
With the publication in April of the FCA’s final rules and guidance in its Asset Management Market Study, value became a requirement and not just an aspiration for asset managers. We must now assess it once a year, an obligation that should hold no terrors for any fund management business which is fulfilling its duty to act in investors’ best interests.
The laudable aim of delivering and demonstrating value can unfortunately be highjacked by a debate which is purely focused upon charges, which is only one aspect of the calculation. This is a mistake: investors deserve an industry motivated by the holistic perspective of true value, not just a one line item in how it is assessed.
This is perhaps best demonstrated by an example. On cost, fund managers who focus on active investing will always lose to firms that passively track the index. It is only when you add performance that value emerges – if fund managers are doing their jobs of course.
Long-term performance after fees is what counts and this focus on value rather than cost is something that everyone in the industry is working very hard to address, in particular our IFA partners who perform a vital function on behalf of their clients.
John Chatfeild-Roberts
Head of Jupiter Independent Funds team
