The IA has set out plans to "future proof" the UK's asset management industry ahead of Brexit, making demands of firms, regulators and the government on regulation, diversity, ESG policy and fintech.
Ahead of its annual conference today (25 June), the trade body published its Vision 2020 report, which warned "changes ahead in the UK's…position in the regional and global economic and political order" spells greater pressure on the country's position as an asset management hub.
In the context of Brexit, the Investment Association (IA) said the Financial Conduct Authority's (FCA) future remit should emphasise "the importance both of the global competitive context and the need to facilitate innovation".
It also called for the Treasury's Asset Management Taskforce to become a permanent "forum for Government, regulators and industry to exchange views on both domestic delivery and international competitiveness". This, the IA said, should sit alongside a "working-level industry regulatory forum specifically focused on investment funds".
The IA said such a regulatory environment would provide for a "range of tax and regulatory enhancements", which will "ensure greater consistency and better outcomes for customers".
It also provided further detail on its proposals for a Long-Term Asset Fund, which is "designed to facilitate investment in illiquid assets". It said that this should sit alongside a new ‘Onshore Professional Fund', which will "ensure that the industry can better serve international and UK professional investors".
IA chief executive Chris Cummings said: "With the UK set to leave the EU over the next few months, these proposals will also help future proof the UK's investment landscape, ensuring it can remain competitive on a global scale and allowing international investors to benefits from innovation in our country's fund regime."
Vision 2020 also noted that "industry-regulatory collaboration" would be important in driving both cultural change and diversity in the asset management industry.
It noted the industry's existing range of inclusion initiatives, such as Investment20/20, and the IA's work "to help translate regulatory policy on culture and diversity into practice".
The IA is developing a "flexible culture toolkit", which it said will provide "practical steps to consider in order to secure, develop, and maintain a healthy culture".
With regard to ESG, the IA said that while firms are developing product sets and investment processes as a result of sustainable investment pressures from customers and policymakers, more must be done with regard to definitions, labelling and disclosure.
It said collaboration between industry, Government, regulators and other stakeholders "to provide customers with clearer products and services".
The IA also said stewardship standards should be improved by a "shared agenda" between the industry, Government, regulators and companies, based on enhanced disclosure, clearer alignment of incentives and a clearer focus on long-termism. It noted that the ongoing review of the UK Stewardship Code is "an opportunity to re-establish the UK as a global leader in this area".
Elsewhere, the IA said the UK will need to develop "the most digitally-enabled fund and competitive investment management environment" to remain competitive in the future.
This, it explained, will also require collaboration between industry, Government and regulators in order to support innovation in "FinTech, RegTech and WealthTech".
It also announced that it is currently developing a new "cyber threat intelligence platform" called TITAN, which the IA said will facilitate the sharing of information by collating data from law enforcement, government agencies and open source research.
TITAN will then look to alert the IA's members of key cyber risks that they need to address.
Cummings said: "The investment management industry is at an inflection point. The needs of our customers are changing rapidly, societal expectations are rising and technological advances will be transformative.
"The IA is today setting out a series of concrete actions, building on existing initiatives that will help to ensure we can deliver in the UK and globally.
"With three-quarters of UK households using the services of an investment manager, our vision for the future is focused on our customers, ensuring they can get sustainable, long-term returns from their investments.
"In getting this right, we will also make sure that funding flows effectively through the economy, helping companies grow and public infrastructure to be financed, meeting the needs of future generations."
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