The Investment Management Association (IMA) plans to complete work to improve charges disclosure and introduce an effective statement of principles by the end of the year, the organisation's chief executive has said.
Speaking at the Rethinking the Economics of Pensions conference, Daniel Godfrey (pictured) said the IMA's proposal for a simple ‘pounds and pence' reporting metric would be considered by the Financial Reporting Council (FRC) this month.
He added it would be a "significant fail" if a short statement of principles to help investors hold IMA members to account was not in place by the second half of the year.
Godfrey said both projects were taking longer than expected, but were vital to improving the way the asset management industry worked.
He said: "To improve the reputation of the industry and become trusted partners of regulators and legislators, we need to act collectively as an industry to demonstrate that we get it. Our long-term sustainability and commercial success depends on delivering the outcomes that our ultimate beneficiaries need."
The IMA's proposal on fees, announced last year requires asset managers to produce a single figure for the cost of holding a unit in a fund over the previous accounting period.
This would combine three figures: performance achieved and operating costs incurred per unit, and a measure of the direct transaction costs such as dealing commission and stamp duty.
Godfrey said it would be inappropriate to try to add implicit costs arising from spreads in asset classes to this metric.
But he said the IMA was working to agree a common basis for funds to report on portfolio turnover rate which would give a clearer picture of these costs.
The project is taking longer than expected because Godfrey wants to use the organisation's quasi-regulatory power as a Statement of Recommended Practice (SORP) issuing body to give it maximum impact.
He said: "If we put this out as guidance we would probably just get 15 of the 20 biggest firms adopting it quite quickly but we would have 150 of the very long tail in the industry not doing it."
Instead, the IMA is adapting its SORP, which must be approved by the Financial Reporting Council (FRC) and is enforced by the Financial Conduct Authority (FCA).
This has been subject to a public consultation and is due to be scrutinised by the FRC shortly.
Godfrey said: "If the final proposals are approved by the FRC we will have a SORP which requires this total, comprehensive and, we believe, simple to understand disclosure of total costs."
The IMA is also developing a statement of principles for members, but Godfrey recognised this would be toothless unless investors could actually assess fund managers against these principles.
He said: "The more profound part of the project is identifying all the issues faced by asset managers where their ability or motivation to remain aligned to the principles might be compromised by conflict of interest or ignorance."
Godfrey said this would be made available online to inform investors, and that managers would be asked to disclose annually what processes they had in place to ensure that they were aligned with the principles.
He acknowledged that a lack of resource at the IMA meant little progress had been made on this front.
But Godfrey said: "I have told my board that if I'm not able to complete this this year, it would be a significant fail on my ‘to-do list' on which they should judge me."
Smoking biggest culprit; obesity second
Average earner will gain £840 in 2018
Will also move heritage items
Responding to letter from Treasury Committee chair Nicky Morgan