I distinctly remember the moment I heard that Daniel Godfrey had been ousted as Chief Executive of the Investment Association. I was in the offices of a national newspaper in London. I said to the money editor that at least he had a lead story for Saturday’s money section and was surprised by his response. He said he wouldn’t be touching a story that was of so little interest to the paper’s readers.
True, the name Daniel Godfrey meant nothing to the vast majority of UK investors then, and still doesn’t today. But almost 12 months on from that fateful day — 6th October 2015 — I’m more convinced than I’ve ever been that Godfrey’s removal from office will prove to be a defining moment in the history of UK asset management.
For those who don’t recall, Godfrey had been trying to make the Association more consumer-friendly. He introduced a Statement of Principles, including a commitment by members to put the interests of the clients ahead of their own. It didn’t go down well. Fewer than 10% of the IA’s members signed it and, in a coup staged by some of Britain’s biggest fund management companies, Godfrey was relieved of his duties.
One year on, where are we now? What happened to Godfrey’s reforming agenda? Have consumers benefited in any way from what he was trying to do?
Alas, depressingly little has changed. The IA has effectively neutered the Statement of Principles, first by making it non-binding and secondly by refusing to name the signatories.
More worryingly, the Association appears to be in denial over the single most important issue Godfrey wanted to address, namely the lack of transparency surrounding fees and charges. Over the summer it produced a report, frankly so inept that it was embarrassing, which likened the problem of hidden costs to the myth of the Loch Ness Monster.
But, for me, nothing revealed more clearly the IA’s attitude towards its customers than an interview given this week by Daniel Godfrey’s successor, Chris Cummings, to FTfm.
Mr Cummings, a former City lobbyist who’s clearly very much more in tune with the membership than his predecessor, made it very plain that the Association’s primary focus now is on extending its influence overseas, particularly Asia.
“The three big areas for us,” he said “are: one, how global this industry is today and how (companies) are succeeding in international markets. The second is what is going on in Europe. Third is to make sure the industry continues to perform well at a domestic level.”
Once again, no mention of the consumer. It’s all about the industry, how to consolidate London’s status as the global financial capital post-Brexit, and how to increase the profits of City fund managers still further.
One year on, Daniel Godfrey’s vision of a more customer-orientated fund industry seems further away than ever. And investors in Beijing and Berlin have as much to fear from that as those in Basildon and Birmingham.
Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
