Investment industry moves to tackle ‘complex and costly’ market

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A joint initiative between major investment firms and trade bodies has been launched in an attempt to bring down the cost and boost the efficiency of trading and settling in the UK.

The Investment Association, ABI, Tisa, Wealth Management Association, the UK Platform Group is to issue a call for information on how the industry can improve the trading process of mutual funds worth around £874bn.

The group says the combination of 300 distributors and 200 fund managers operating in the UK has created a “complex and costly operating environment”.

It adds while progress has been made, “there are still a myriad of different savings and high levels of manual processing”.

The review will be chaired by Fidelity International head of business development Ed Dymott with Tisa’s Charles McCready as programme director.

Dymott says: “A growing number of firms have been saying for some time there must be different ways in which the fund industry could operate more efficiently. We have now seen a growing consensus that now is the time to engage as an industry to look at what a possible vision for the future may look like.

“Looking at other markets, such as the US, parts of Europe and Asia, there are clearly solutions that help fund managers reduce cost and risk whilst creating better client outcomes. These solutions need to be evaluated.

He adds: “We plan to undertake a full and transparent review where we want to work with any interested providers to help build the solution of the future.”

Investment Association interim chief executive Guy Sears says: “The overall process for trading and settling fund holdings in the UK is disjointed and expensive, suffering from a lack of common industry standards and parts of the process are currently carried out manually.”