Money management firms must work harder to improve the value of their offerings to asset owners, delegates at an industry conference were told this month.
The money management industry needs to better align its offerings with the needs of asset owner clients, speakers from a range of institutions said at the Pensions and Lifetime Savings Association's investment conference, held March 7-9 in Edinburgh.
The presentation of fees is one area for improvement, with a call for more "comprehensible" offerings coming from Anne Richards, CEO of M&G Investments, speaking March 8. Ms. Richards added that the challenge for the industry is to create overarching standards for the reporting of fees, particularly given the Financial Conduct Authority's scrutiny in its review last year. "We need to figure out how to get better in order to find ways of absorbing these costs" related to regulation and trading.
The right fee structure should satisfy multiple, different regulatory requirements, she added. "Customers more often choose simplicity over a good economic proposition."
The need for improved fee disclosure and transparency was championed by industry experts at the PLSA conference because investors not only face a series of new investment risks, such as climate change, but also will face additional difficulties when assessing the more familiar macroeconomic risks. Economists speaking on a separate panel on March 8, said economic indicators used to measure risk and predict market movements have changed. Central bankers now drive interest rates changes, instead of free market forces, said speakers.
David Miles, former member of the monetary policy committee at the Bank of England, said: "GDP in many developed markets, including the U.K., is less capital intensive than it used to be. (Also), GDP is not heavy stuff anymore. It's almost weightless and in 30 years it will be as heavy as it is today."
Megan Greene, chief economist at John Hancock Financial Services, said during the same panel, "Labor, because it is so cheap globally, is being (considered) the new capital."