The U.K. Financial Conduct Authority endorsed the Cost Transparency Initiative's templates that were launched Tuesday and are designed to help standardize disclosure around investment costs and fees borne by institutional investors.
The Cost Transparency Initiative — a partnership among the Pensions and Lifetime Savings Association, the U.K. Investment Association and the Local Government Pension Scheme Advisory Board — created a new standard for investment cost data for U.K. pension funds, consultants and money managers aimed at helping pension fund trustees compare fees charged by different investment providers and assist money managers with reporting these costs.
Trustees will be able to better scrutinize and challenge costs and performance and ensure pension fund participants are getting the best value for their investments, a Cost Transparency Initiative statement said.
"This was a key remedy of the FCA's money management market study (in 2017) and is a positive final step completing the work of the Institutional Disclosure Working Group," said Christopher Woolard, executive director of strategy and competition at the FCA, in a news release. "Institutional investors are now provided with the tools to give them a clearer and more detailed understanding of the charges of their investments. It is good to see investors working with industry to design a framework that can be a success for all."
Commenting on the launch of the templates, Guy Opperman, the U.K. undersecretary for pensions and financial inclusion, said in a separate news release: "High fees can eat into savers' pension pots and add to employers' costs. This initiative will help pension schemes take a holistic view of costs and charges as they strive to ensure their members get value for money.
"I'd strongly encourage trustees and investment managers to ... adopt the new templates. The government will legislate robustly to make this happen if the industry does not resolve this on a voluntary basis at speed," Mr. Opperman warned.
The templates are available to download from the Cost Transparency Initiative's webpage on the PLSA's website.