A regulator-backed cost transparency initiative which will allow pension funds and other asset owners compare the fees charged by money managers operating in the Irish market has been established by UK analytics company ClearGlass.
The aim is to encourage fund managers to price their services at the optimal level and drive better value for money for investors by collecting and comparing fund costs and charges across a range of asset classes.
There are almost 75,600 defined contribution and defined benefit funds in the Irish pension sector, with a total asset value of €128.7 billion. But fees charged by funds managing this money – and how they compare to each other – is not readily available.
ClearGlass and its chief executive, Chris Sier, have been pioneering a new cost transparency initiative in the UK since 2018 following a review of costs by regulators there. The company has now collected data for the Irish market.
It found that asset owners in the UK and in Ireland such as pension funds had difficulty accessing the necessary cost information to make effective value-for-money assessments on behalf of their investors.
ClearGlass said the fees-benchmark/cost-transparency initiative has already been widely adopted by investment management firms across the UK, which is Europe’s largest investment fund market. It is rolling out similar initiatives in other European countries.
“With the introduction of the cost transparency initiative, Ireland is now firmly ahead of the European curve on cost transparency within the fund management industry,” said Mr Sier.
“This is an important development for Irish pension schemes, and we believe the active support of the Irish Association of Pension Funds for the availability and provision of this data is aligned with the best interests of Irish savers and will ensure the long-term success of this initiative. ”
ClearGlass’s benchmark has the backing of the Irish Association of Pension Funds (IAPF), the body that represents Irish pension savers.
"The availability of comprehensive and transparent information on costs and charges is essential to ensure the pensions industry continues to provide the Irish people with security in retirement," said IAPF chief executive Jerry Moriarty.
“We have taken the initiative to promote the cost transparency initiative disclosure templates across our membership. Once in place we will call upon asset managers to engage and provide the necessary data to their clients, ensuring Irish investors and savers can benefit from greater cost transparency and value for money,” he said.
ClearGlass works with more than 1,000 asset owners and in excess of 500 asset managers with assets exceeding €1.3 trillion.