Reykjavik, 15 March 2022 – ClearGlass, the independent cost transparency data provider, has announced the launch of the Cost Transparency Initiative (CTI) for pension funds, institutional investors, and investment managers in Iceland. The CTI is an industry-standard designed to support investors by collecting and comparing fund costs and charges across a range of asset classes.
Originally introduced in the UK in 2018, the CTI was initiated by the Financial Conduct Authority (FCA) following a review of cost transparency within the asset management industry, which found that UK asset owners, such as pension funds, were struggling to determine the value for money they were getting from their investments.
The CTI follows the recommendations of an expert group, the Institutional Disclosure Working Group (IDWG) and aims to provide investors with the tools necessary to produce standardized costs and charges. This information will allow institutional investors to make clear cost comparisons across different investment platforms, enabling them to deliver better value for their clients.
The CTI has now been widely adopted by investment management firms across the UK with 80% of pension schemes using the templates, representing an estimated AUM of £2.4 trillion as of 2021. The launch in Iceland was marked by an event in Reykjavik as part of discussions to strengthen financial services ties across the two regions. Briefings were provided to the Icelandic pension fund community, with the coordinating help of the Icelandic Pension Funds Association (Lífeyrismál.is).
In recent years we have seen a significant increase in the share of foreign assets in the portfolios of Icelandic pension funds. Such assets are in most cases managed by external managers in major financial centres such as London and New York. Costs of their services are therefore an important factor in the operating expenses of Icelandic pension funds. The Icelandic Pension Funds Association therefore welcomes and supports the introduction of cost transparency into the Icelandic pension fund market. Thorey S. Thordardottir, Managing Director of the Icelandic Pension Funds Association
The availability of comprehensive and transparent information on costs and charges is essential to ensure Iceland’s financial industry remains competitive across Europe. Our decision to support the CTI programme is a clear indication of our commitment to ensure that we are delivering the best possible outcomes for our stakeholders. Gunnar Baldvinsson, CEO, Almenni lífeyrissjóðurinn, the first adopter of the template in Iceland
Iceland’s adoption of the CTI template will be game-changing for institutional investors across the country. We are proud to be involved in supporting this initiative and hope investors – both institutional investors and asset managers – quickly see the benefits of greater cost transparency and price discovery across the industry. There are 21 pension funds across Iceland in total, with their estimated AUM standing at £38bn (€45bn). Widespread adoption will therefore bring significant benefits to savers and have an overwhelmingly positive impact on the wider Icelandic economy. Dr Christopher Sier, Research Director at ClearGlass Research
Media Contact For further information, please contact: Brandon Bhatti Hume Brophy +44 (0)7 741 311 824 clearglass@humebrophy.com