CTI launches cost disclosure templates

CTI launches cost disclosure templates

A set templates and guidance for asset managers on how to report pension scheme charges has been launched by the Cost Transparency Initiative.

The CTI has today (May 21) released templates and guidance aimed at asset managers, and other suppliers of services to pension schemes, which can be used to produce standardised cost and charges information.

This framework will allow pension scheme trustees to make clear cost comparisons across different investment platforms, enabling them to challenge asset managers on cost and performance to get better value for their clients.

The templates have been designed to be machine readable which means data can be easily extracted and processed. 

The CTI expects asset managers to be in a position to report against December 2019 and April 2020 year-ends using the new templates and tools.    

Mel Duffield, chair of the CTI, said: "Each of the three founding organisations – the PLSA, Investment Association and Local Government Pension Scheme Advisory Board – has shown its commitment to taking forward the excellent work undertaken by Chris Sier and the entire Institutional Disclosure Working Group team, and we are delighted to have reached this stage.

"The board will review the take-up of the templates and guidance after the end of the reporting period in April 2020 and will be working closely with government, regulators, and industry to ensure high adoption levels in the interim."

The templates and guidance are free to download with some guidance aimed at asset managers and other parts intended for use by investors. 

They can be downloaded from the Pensions and Lifetime Savings Association’s website.

Mike Lacey, partner at Berkshire-based financial adviser firm Bowman Pension Consulting, said: "This is a very welcome development.

"Exposing charges to the oxygen of publicity will effectively force them to reduce over time.

"Having a template and standardised method of reporting will enable an easy comparison, and nobody wants to be seen as the most expensive asset manager/consultant/provider on the market."

The CTI was launched in November 2018 and was set up to implement, promote and encourage the use of the cost transparency templates across the pensions and investment industries.

The cost disclosure templates proposed by the group were endorsed by the Financial Conduct Authority last year.

At the time the FCA had stated it wanted to see more consistent and standardised disclosure of charges to institutional investors and thought a standardised disclosure template should provide a clearer understanding of the cost for a given fund or mandate.

In November 2018, Chris Sier, former chair of the FCA’s IDWG, set up a data collection and analysis platform called ClearGlass to allow pension schemes to access cost information from asset managers. 

ClearGlass provides investment cost reports to pension schemes by collecting and analysing data from asset managers, according to the standardised templates prescribed by the IDWG.

Mr Sier said the new templates should mean that asset managers can build their systems to collect and distribute data automatically and at scale.