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HM Treasury has published a report by the Asset Management Working Group (AMWG) entitled Asset Management: the UK as a global centre. HMT established the Asset Management Working Group alongside a number of other working groups designed to report on different aspects of financial services.
The report identifies the particular challenges and opportunities for the UK as a centre for asset management. The HMT has started from the position that the UK is a global leader and centre for asset management. The AMWG was asked to set out recommendations to the industry, the regulator and the government in order to ensure that the UK maintains its position. The AMWG is made up of the great and the good from the asset management sector in the UK, with the Chancellor of the Exchequer and the Chairman of the Investment Management Association as co-chairs. The report makes 22 recommendations which are a mixture of aspirations, policy aims and calls for immediate action.
Here are some of the report statements:
· The UK is home to a leading global asset management industry. Its origins lie with the development of investment trusts in the nineteenth century and, since the Second World War particularly, the industry grew substantially as funded pension provision became more widespread. It has since become the world’s largest asset management centre outside the US, and is characterised by a wide range of firms, products, fund vehicles and clients.
· The industry’s function is to invest the funds of its clients – ultimately for the most part ordinary savers and investors. It enables clients to achieve a level of portfolio diversification and gives them access to a range of instruments and markets in a way and at a price that they could not accomplish on their own.
· Its economic relationship with its client is one of agency. Investment management firms do not have or require large balance sheets because clients’ money is held under separate custody. Reputation, not capitalisation, is the foundation of trust.
· A centre which aspires to be or remain a world leading asset management location needs an industry which meets, indeed defines, the highest standards.