Regret is not something Daniel Godfrey feels when he looks back on his resignation from the Investment Association six months ago. The former chief executive of the trade body continues to be seen as a key spokesperson for the asset management industry and has embarked on a series of “creative initiatives”.
But when it comes to the events that led to his exit, Godfrey is keen to point out the responsibility does not lie solely with him.
“The Investment Association had a strategy that was agreed by the board, which was to try to work out how it could improve in every area.
“The board felt by doing that we would give ourselves maximum influence with regulators and policymakers and we would improve our reputation with customers and the rest of the market.”
Godfrey, who was at the helm of the Investment Association since 2012, had pushed for more transparency on fund fees through a statement of principles.
“As well as maximising our chances of the most appropriate possible regulation and being more favourable to consumers we thought that was the best way to be commercially successful over the longer term.
“But you can’t just have a strategy and not do anything about fulfilling it, and that strategy led to certain initiatives, which a small number of members at least found unattractive.”
Indeed, Godfrey’s resignation came after a number of the Investment Association’s biggest members, including Schroders and M&G, threatened to leave. It is understood a number of fund groups were unhappy with his plans and thought he had become too focused on consumers as opposed to members.
The Investment Association has since pushed back indefinitely the deadline for member firms to sign the statement of principles.
Godfrey says the Investment Association strategy did not go far enough in terms of sustaining “a critical mass support” from the membership.
“You can always look back and say ‘would I have done something different to lead to a different outcome?’ The answer is, yes, I could have done something differently, but I don’t believe it would have led to a different outcome.
“There was not much point in me rolling back and doing something less because something less in my mind would not have got us to where the industry needed to be.”
City lobbyist and founder of TheCityUK Chris Cummings was appointed chief executive of the Investment Association at the beginning of April, taking over from the organisation’s director of risk, compliance and legal Guy Sears, who served as interim chief executive in the months following Godfrey’s exit.
Godfrey says: “I have known Chris for a very long time and I’m sure he’ll do a great job. He’s inheriting a great team, especially Guy Sears.”
“The idea of an investment fund that does not have any shareholders sitting above could enable you to do some quite interesting things”
But while Godfrey is confident the team at the Investment Association is ready to face the issues ahead for the asset management industry, he believes the trade body itself will not be without its own challenges.
“Clearly, there is a critical mass that wants the regulator to do the regulating and doesn’t want the Investment Association to take a lead and try to help the industry improve standards in certain areas.”
Today, along with consulting work on regulation for investment app Moneybox, Godfrey is preparing the launch of an investment trust.
He is exploring the possibility of how a trust could be used to provide a truly mutual investment fund and wants to develop a new structure where investors are placed at the centre and the trust is not governed by shareholders.
“The idea of an investment fund that does not have any shareholders sitting above could enable you to do some quite interesting things, particularly as a very long-term investment theme.”
He is also working on establishing an operation in the asset management space. “I don’t want to set up an asset management firm but I want to help investors be successful with investment managers.”
Godfrey says the secret of success in the investment industry starts with improving transparency. For him, transparency means providing information at a level people can understand and absorb, so they can make informed decisions.
“I don’t think transparency means drowning people in information.
“My view of cost transparency is around separating the past from the future because you can be absolutely accountable of what has happened in the past and can give people very precise information. As regards to the future, there are some things you know, which is broadly what an ongoing charge figure for funds is trying to do.”
Godfrey defends the reputation of the fund management industry but admits there is still a lot of work to be done to improve it. “We spend too much time assessing who is going to do best rather than making sure we do well.”
Godfrey says advisers need to complete the investment chain and focus on their clients’ long term needs. “The best thing advisers can do is make sure clients start as early as possible to save as much as they can, taking a very long-term perspective. “I hope the industry and the investment chain looks different in 10 years, with a longer-term view and acting in a way that has the best chance of meeting clients’ interests rather than pandering to their emotional drivers.”
2015-present: Consultant, Moneybox
2012-2015: Chief executive, the Investment Association
2009-2012: Communications director, The Phoenix Group
1998-2009: Director general, Association of Investment Companies
1994-1998: Marketing director for investment trusts and communications director for unit trusts, Fleming Investment Management
1989-1991: Head of sales and marketing, Laurentian Unit Trust Management
1988-1989: Product development manager, Mercury Asset Management
1985-1988: Marketing manager, Schroders
1982-1985: Life inspector, UK Provident
What’s the best advice you’ve received in your career? Go for it.
If I were in charge of the FCA for a day I would… Cancel the move to Stratford.
What has had the most significant impact on financial advice in the past year? Changes around research and dealing commission.
What keeps you awake at night? I sleep pretty well.
Any advice for new advisers? Always remember you are the champion of your client.