Andy Agathangelou has expressed concern the Financial Conduct Authority (FCA) could allow the Investment Association (IA) to write its own cost disclosure rules, which he said could favour asset management firms to the detriment of investors.
Transparency Task Force founding chair Agathangelou said the IA was "too conflicted to be responsible for the development of a costs disclosure code".
He argued the IA's code did not take care of retail investors and had not been subject to open scrutiny. It also did not use legally-binding terms to describe what the costs are.
The IA has consulted on an industry code which aims to provide the blueprint for the reporting of charges and transaction costs across the market, "in line with regulatory requirements".
But Agathangelou (pictured) said: "It should be the FCA and not a conflicted trade body that initiates and leads the development of a regulatory framework that mandates for comprehensive cost disclosure, with full industry consultation.
"The IA is a trade body and trade bodies have a primary duty of care for the commercial interests of their members. As such, they are too conflicted to be responsible for the development of a costs disclosure code."
The association's proposals came in the wake of the regulator's own consultation, which is due to set out its finalised rules on cost disclosure in workplace pensions in the coming months. The IA said it hoped its finalised proposals would meet the FCA's cost disclosure expectations.
An FCA spokesperson refused to comment but explained the Asset Management Review focused on improving cost disclosure for institutional investors and would be published in due course.
Agathangelou had sat on the IA's disclosure code independent advisory board, which helped develop the body's consultation and proposals. He does not endorse the report and has made it clear he believes "the independent advisory board has failed to perform adequately".
He said he hoped the IA and its independent advisory board would "raise their game" as a result of his criticisms.
Transparency Task Force is a collaborative, campaigning community dedicated to improving transparency in financial services.
'Entire value chain'
Agathangelou also urged the regulator to look at the "entire value chain" of investment when considering whether it will accept the IA's proposed codes when they are put forward.
He said: "It is vital that all is done to ensure value for money for consumers so the regulatory framework the Financial Conduct Authority creates must cover the entire value chain, not just asset management."
Commenting on the publication of its proposals in March, IA director of public policy Jonathan Lipkin said its consultation was designed to encourage feedback from consumers, government, regulatory bodies and the industry.
He said: "The asset management industry is fully committed to transparency and recognises the need to provide clear disclosure of both charges and the transaction costs incurred as part of the investment process.
"The new code provides, for the first time, a common framework for enhanced disclosure across investment products and services. It is a major opportunity to consistently define and provide data on charges and transaction costs."
The IA would seek to work with the FCA, he said, and receive regulatory recognition for the proposed codes to enter the regulator's Conduct of Business Sourcebook.
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