Asset managers must “galvanise” themselves and develop a coherent response to the criticisms of active management in the Financial System Inquiry, says BT's head of investment products.
Speaking at the Financial Services Council conference on the Gold Coast yesterday, BT head of investment products Dan Campbell said there is currently “a lot of noise” in the public domain about the value of asset management.
In particular, active management and the perceived high level of fees in the industry has been raised by the Grattan Institute and the Financial System Inquiry's (FSI's) final report, Mr Campbell said.
“But it's hard to call that a debate, because I think one of the key participants in the debate [the active management indsutry] has been fairly absent,” he said.
The reason for the absence of active managers from the public debate is largely down to the disintermediation of the industry, Mr Campbell said.
“Active managers tend to focus their time on communicating with their clients – not the end users of their products,” he said.
Mr Campbell pointed to the “quite negative conclusions” drawn out of the FSI final report on active management.
“I really think we need to galvanise ourselves and come up with a more coherent response to some of these criticisms,” he said.
“As a collective we need to focus on getting our message out about our value proposition,” Mr Campbell said.
For starters, the industry should be open to embracing transparency, he said.
“To make a proper assessment of value, transparency in terms of fees and costs is actually a very good thing for our industry,” Mr Campbell said.
“It makes it easier for us to defend our position if the end users of our products have a much clearer perspective on what we're actually charging them for.
“While there's a lot of talk about transparency and how that should be produced in terms of the super system, I think as fund managers we should absolutely welcome it,” Mr Campbell said.
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