New templates introduced by the Cost Transparency Initiative trace their origin back to work by Chris Sier, former chairman of the U.K.'s Institutional Disclosure Working Group, a unit established by the Financial Conduct Authority, the U.K.'s financial watchdog.
"The Dutch pension initiative was happening in parallel to the work I was doing in the U.K.," said Mr. Sier, now chairman of London-based ClearGlass Analytics Ltd. His interest was piqued when the Federation of the Dutch Pension Funds, Pensioenfederatie, observed that as soon as it announced its standard, asset managers started to sharpen their pencils. The Dutch system, initially voluntary, was made mandatory in 2015.
Meanwhile, in the U.K., the lack of comparable data was hindering transparency.
"In response to the Dutch initiative, I wrote a paper which describes why a standard is important and proposed one for the U.K.," Mr. Sier said.
After this paper was published in March 2016, Mr. Sier was approached by the Local Government Pension Scheme Advisory Board, which represents 89 local authority pension schemes in England and Wales with combined assets of £275 billion ($334.3 billion). The LGPS board wanted to use the standard with their fund managers to unify the approach to cost collection across LGPS funds.
"They asked me if I would work with them to embed it with the 20 largest managers, by number of mandates," Mr. Sier said. After meeting with managers for 12 months, the LGPS Code of Transparency was published in May 2017.
Those 20 managers wanted other managers to also use the data standard and so asked Mr. Sier to work with the Investment Association, the U.K.'s investment managers' trade association.
The LGPS code, in turn, caught the attention of the Financial Conduct Authority, which formed the Institutional Disclosure Working Group in 2017. In June 2018, the group published a summary of its recommendations.
The CTI was launched in November 2018, in response to one of the recommendations. It is supported by two trade associations — the Pensions and Lifetime Savings Association, which represents the U.K.'s retirement industry, and the IA, as well as the LGPS Advisory Board.
