Former Investment Association chief executive Daniel Godfrey has urged his successor Chris Cummings to reinstate a deadline for the trade body’s Statement of Principles code.
Announced in April 2015, when Godfrey was still at the helm of the Investment Association, the code aimed to educate investment managers on their responsibilities towards clients. Godfrey was subsequently ousted as chief executive of the trade body.
The IA told Fund Strategy it will report back to its members on the code “when implementation discussions have concluded”.
In December 2015 the IA pushed back indefinitely the deadline for fund managers to sign up to the principles, originally due on 1 January 2016, after members raised concerns about the additional compliance burden imposed by the project.
Godfrey says: “I’d like to see what happens to the Statement of Principles when Chris starts in September.”
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 principles and to provide credible reassurance that they were doing their best to follow them.
“A small number of firms successfully undermined the take up by creating alarm that the provision of credible reassurance would be a significant compliance burden,” says Godfrey.
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 around the time of Godfrey’s departure.
The 10 key principles included 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”.
Godfrey says: “The first principle says to always put the interest of clients ahead of your own. This is absolutely appropriate because as investment managers rightly often remind us they have an agency model unlike that of banks and insurance companies.
“Before a client becomes a client they have to agree a mandate and a fee and investment managers as agents are perfectly entitled to charge a fee which is profitable.
“I very much hope that under the new leadership the Investment Association will be able to introduce the Statement of Principles and succeed where I failed.”
Cummings, TheCityUK founding chief executive and former Aifa director general, will start his role at the Investment Association in the third quarter of this year.