CFA UK is pushing for changes to the way that fund houses assess value for money to improve transparency for the end investor and comparability between providers.
In a whitepaper published today, the British division of the CFA Institute said that a greater emphasis on a fund’s long-term performance would help to restore public trust in the sector.
The paper says that the publication of information on a fund’s performance since inception was more important for investors than returns over the past year.
To draw attention to long-term returns, information should be published so that the most recent returns for the shortest time periods should appear last, reversing the order in which net risk-adjusted returns are usually shown.
The paper, ‘Value for Money: A Framework for Assessment’, follows the publication in June by the UK’s Financial Conduct Authority on rule book changes needed to tackle issues highlighted in the financial regulator’s 2017 Asset Management Market Study.
Will Goodhart, chief executive of CFA UK, said: “We need to develop a better framework for assessing value for money to improve transparency for the end investor and enable effective comparability between providers.
“We’re pleased to see that the profession is increasingly focusing on value. Given the FCA’s incoming requirements, this is an issue everyone should be thinking about now, in order to prepare.”
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