UK Pension Schemes Could Save £2bn in Fees, Research Finds
Financial Times
May 15, 2023
Data showing big gaps in investment costs suggests lack of transparency is hitting pension savers. UK pension schemes could save about £2bn from fees paid to asset managers without sacrificing returns, according to research that suggests price competition among institutional investors is failing to drive down costs
What is the Cost Transparency Standard (CTS)?
The Cost Transparency Standard (CTS) data collection framework, supported by ClearGlass, provides institutional asset owners and their investment advisors with cost verification and benchmarking reports that enable them to assess the Value for Money (VfM) delivered by managers. It ensures asset owners are able to obtain and compare all of the fees they incur for every portfolio they hold.
Following the successful model of the Cost Transparency Initiative (CTI) in the United Kingdom, the Pensions Authority is now introducing the Cost Transparency Standard (CTS) in Ireland. The Cost Transparency Initiative (CTI) was introduced by the Financial Conduct Authority (FCA) in the United Kingdom in 2018 based on recommendations from The Institutional Disclosure Working Group (IDWG) set up by the FCA and chaired by a leading professor of finance, Professor Chris Sier.
The primary objective of the Cost Transparency Initiative (CTI) was to enable asset owners and their advisors to assess whether they are receiving value for money on mandates held by managers employed, and for asset managers to understand whether they are delivering competitive outcomes and value for money for clients.
In addition to the Cost Transparency Standard (CTS), a number of Value for Money (VfM) initiatives have been introduced by regulators including the IOPR II Critical Review Directive in the European Union. The IORP II Directive seeks to improve the way occupational pension funds are governed, to enhance information transparency to pension savers and to clarify the procedures for carrying out cross-border transfers and activities.
ClearGlass Analytics
ClearGlass Ireland, based in Dublin, supports institutional asset owners and their advisors with participation in the Cost Transparency Standard (CTS) recently announced by the Irish pensions regulator, The Pensions Authority, and led by the Irish Association of Pension Funds (IAPF).
ClearGlass UK, based in London, has supported over 850 institutional asset owners and their advisors in the United Kingdom with participation in The Cost Transparency Initiative (CTI), the equivalent of the CTS in the United Kingdom. These asset owners have assets under management (AuM) exceeding €1.5 trillion.
ClearGlass UK has also worked with over 530 asset managers who hold mandates placed by institutional clients in the United Kingdom. This includes almost all asset managers operating in Ireland.
Cost Transparency in Ireland
36k+
Mandates
assessed across 46 investment strategies
530+
Asset Managers
trust ClearGlass with their data
850+
Pension Schemes
have used ClearGlass to measure and manage their investment costs
10+
Advisors
have used ClearGlass to offer greater transparency to their clients
Asset Owner Market Benchmarking
As well as collection and verification of cost transparency templates from
asset managers on behalf of asset owners in both the UK and Ireland,
ClearGlass also provides market benchmarking across 46 investment
strategies for asset owners and their advisors.
Asset Manager Market Positioning
ClearGlass also provides asset managers with access to market positioning
analytics which enables firms to understand their competitive position relative to the market.
ClearGlass Research
ClearGlass Research produces academic research by a group of eminent professors of finance led by Professor Chris Sier, who led the creation of the Cost Transparency Initiative (CTI) for regulators in the United Kingdom.
Value for Money Reporting
ClearGlass is able to benchmark a scheme’s costs and its performance, evaluating whether the managers that a scheme works with are delivering good Value for Money (VfM).
VfM Reports are generated mandate by mandate to create a simple, single sheet report that gives a scheme an indication of where the manager sits in relation to the portfolios of other managers within ClearGlass’s benchmarking universe.
These reports are compliant with the Value Assessment and Consumer Duty regulations in the United Kingdom, as well as the IORP II Directive Critical Review in the European Union.
Templates
Please select the template suitable for your requirements
