Former Investment Association chief executive Daniel Godfrey says he is “disappointed” the trade body has taken a non-binding approach to the Statement of Principles initiative he attempted to launch before his departure from the organisation.
On Friday, the Investment Association published a finalised version of the Statement of Principles, but confirmed it would not be publishing signatories or require member firms to publish statements on their websites.
It came just over a week after Godfrey urged his successor, Chris Cummings, to reinstate the code, which aimed to educate investment managers on their responsibilities towards clients.
When the Statement of Principles were published, 25 firms, which represent 20 per cent of the industry’s assets under management, committed to follow the code and to provide credible reassurance that they were doing their best to follow them.
The 10 key principles include encouraging investment managers to “always put clients’ interests first and ahead of their own” in the execution of their duties, as well as “ensure regular, timely and clear lines of communication with clients” and “maintain a corporate culture that sustains these principles”.
However, in December 2015 the IA pushed back indefinitely the deadline for fund managers to sign up to the principles, after members raised concerns about the additional compliance burden imposed by the project.
Last year Schroders and M&G, which have not taken part in the initiative and are two of the Investment Association’s biggest members, threatened to leave the trade body.
In a note published on its website, the organisation said: “The Investment Association recognises there are other ways, at least as valid and informative, to describe the core responsibilities of fiduciary asset managers.
“Indeed, amongst many other provisions, the FCA’s rulebook requires that an asset manager must act honestly, fairly and professionally in accordance with the best interests of its client.”
Godfrey, who is currently employed by the FCA, says he is “disappointed, but not surprised” at the IA response.