ClearGlass Research Featured at Major International Finance Conference

Research drawing on data and insights from ClearGlass Analytics was showcased at the Financial Management Association (FMA) Annual Meeting 2025, held last week.

The study leverages ClearGlass’s extensive dataset of institutional cost and fee data to examine opacity in asset management pricing. Using proprietary data collected under the UK’s Cost Transparency Initiative (CTI) framework, the authors uncover a systemic discrepancy between the publicly listed fees on fund factsheets and the actual, client-specific fees paid by pension schemes and other institutional investors. Across more than 45,000 individual investment mandates, the researchers find that over 96% of funds charge different rates to different institutional clients for the same products - even when investment size is held constant.

Employing a behavioural economics framework, the paper models how this information asymmetry leads to weak price competition and persistent excess profits for asset managers. The analysis suggests that pension funds, despite being sophisticated and professionally advised, are subject to “institutional myopia” - varying levels of awareness and negotiating capability that allow differential pricing to persist.

Among the most striking findings is that economies of scale explain less than 10% of the variance in institutional pricing, indicating that factors such as investor sophistication and consultant effectiveness play a much larger role. The study also identifies significant disparities in outcomes depending on the investment consultant used, with some consultants consistently securing better deals in particular asset classes.

The researchers estimate that the cost of this hidden pricing inefficiency amounts to roughly £1.8 billion annually in the UK alone, a figure that, when compounded over the average pension lifecycle, represents as much as £85 billion in value lost to pension savers and sponsors.

By combining rigorous empirical analysis with a formal theoretical model, the study demonstrates that even in highly professional markets, opacity and behavioural frictions can suppress genuine price competition. The authors argue that true transparency - enabled by standardised, comparable, client-level cost data - is essential for ensuring value for money in institutional investment.

ClearGlass’s inclusion in this prominent academic forum highlights the growing importance of its data in global research on investment costs and value-for-money in institutional asset management. The findings reinforce the value of cost transparency initiatives in promoting fairer and more efficient asset management markets. A similar initiative, the Cost Transparency Standard, was recently launched in Ireland, with similar findings.

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