13 February 2015

The Investment Association published paper on comprehensive disclosure of costs and charges

The Investment Association proposes a new methodology for a consistent basis of calculation for PTR. It also proposes that investors would be told whether the PTR is high, medium or low for a fund relative to other similar funds and how this relates to the transaction costs. To allow for consistent disclosure across all investment products, including pension schemes, The Investment Association has created a framework and template for the disclosure of charges and transaction costs. This is intended as a foundation for good disclosure and will need to be developed in compliance with forthcoming UK and EU regulation in this area.

The paper undertakes an extensive examination of all the explicit and implicit costs incurred when investing in a fund and sets out how they should be disclosed to the end investor in a meaningful way, including differentiating known historic costs from estimated future costs.

Daniel Godfrey, Chief Executive of The Investment Association, said: “The Investment Association is setting out the building blocks for good disclosure in the context of a complex and evolving domestic and European regulatory landscape. The industry is working with government and regulators to build a framework for comprehensive, meaningful and consistent information that that can be made available across the whole investment and pensions market for the end investor.”

Full press release

Summary of paper

Full paper

© IMA