Will Investment Association’s Godfrey be forced to resign?

Laura Suter

The future of Investment Association chief executive Daniel Godfrey must surely be in question amid the prospect of a mass walkout of key investment firm members and crisis meetings held today.

Yesterday saw M&G and Schroders say they are planning to leave the organisation, while Invesco Perpetual, Aberdeen Asset Management and Fidelity Investments are also rumoured to be leaving. Fundweb also understands that Neptune Investment Management and JP Morgan Asset Management are considering an exit from the trade body too.

Collectively the initial five firms account for 29 per cent of UK retail assets, giving the IA reason to sit up and listen.

After the meeting today a source close to the IA said: “The board has met and the message out of the meeting is that it is focusing on collectively doing whatever it can to keep the association membership intact. 

“The board, including Godfrey, is united in winning back members that are planning to leave the trade body and will do whatever it takes to keep the membership intact.”

This could mean that Godfrey will stay and work on changing the direction of the IA to be more in line with member firm’s demands, or it could mean he is willing to do anything it takes to keep the trade body together, including resigning.

The member firms talking about quitting have been tight-lipped on their reasons for going, apart from Neptune, which says it wants the IA to refocus on key issues of importance where it can make a “significant contribution”. 

“This is in order to ensure our voice is heard in the framing of the government’s policy agenda. In particular we worry that in key areas of the market – such as the defined contribution and local authority pension scheme arenas – the government’s focus on cost above all else has removed the freedom of investors to pick the active fund managers who we believe will be crucial to meeting their long-term needs,” says Charlie Parker, head of distribution at Neptune Investment Management.

The IA has said an area of focus for the coming year is on doing more consumer-facing work, helping investors to understand the industry better and encouraging a savings culture. Its most recent communications were lobbying the government to alter pension taxation rules to “give people the confidence to save for later life”.

Others have pointed to the IA’s work on charges transparency as a potential cause for strife among members. 

Godfrey and the IA have been working hard to lobby fund managers to display fund fee information in pounds and pence, rather than percentages. From January next year regulators will now ensure that a fund’s prospectus will have clear information on how much money the manager spent running the fund that year. 

Godfrey Daniel Investment Association 2015

Gina Miller, founder SCM Direct, says another cause for dissatisfaction among member firms is the IA’s work on its statement of principles, released this year, which outlines standards for fund managers to adhere to. Among the statements are that fund managers will always put their clients’ interests first and ahead of their own, that they will make all costs and charges transparent and understandable and will disclose to investors the source and value of any other material benefit they receive as a consequence of their role as investment manager.

None of the seven fund managers understood to be leaving or considering their membership were on the list of signatories to the statement when it was released last month. 

M&G, Schroders, Invesco Perpetual, Aberdeen Asset Management, Fidelity Investments and JP Morgan Asset Management all declined to comment.

Laura Suter is editor of FundStrategy and head of investment news at Money Marketing.