New value for money benchmark for investment funds launched in Ireland

IRELAND BECOMES FIRST EU COUNTRY TO ADOPT THE COST TRANSPARENCY INITIATIVE WITH BACKING FROM PENSIONS INDUSTRY BODY

Independent data provider ClearGlass has launched the Cost Transparency Initiative (CTI) in Ireland. The CTI is an industry standard that enables pension funds and other asset owners to collect and evaluate fund manager performance and cost data – encouraging fund managers to price their services at the optimal level and ultimately drive better value for money for investors.

Speaking on the opening day of the Irish Association of Pension Funds (IAPF) Spring Conference Week recently, ClearGlass CEO Dr Chris Sier introduced the CTI to the Irish market, with asset managers, pension schemes and their advisers across Ireland now encouraged to adopt the framework to ensure the CTI becomes an industry standard.

The CTI is launched with the full support of the IAPF, the body that represents Irish pension savers. IAPF CEO, Jerry Moriarty, confirmed the association’s backing for the initiative during the conference.

Jerry Moriarty, CEO of IAPF, said: “The availability of comprehensive and transparent information on costs and charges is essential to ensure the pensions industry continues to provide the Irish people with security in retirement. We have taken the initiative to promote the CTI disclosure templates across our membership.

“Once in place, we will call upon asset managers to engage and provide the necessary data to their clients, ensuring Irish investors and savers can benefit from greater cost transparency and value for money.

The CTI provides investors with the tools necessary to produce standardised costs and charges. This information will allow Irish pension funds and trustees to make clear cost comparisons across different investment platforms, enabling them to deliver better value for money for their clients. While the disclosure regime is not a regulatory requirement, the IAPF is confident there will be strong engagement among investors, asset managers and intermediaries.

There are currently 74,866 defined contribution (DC) and 597 defined benefit (DB) active funds in the Irish pension fund sector with the total asset value of the sector standing at €128.7 billion. It suggests widespread adoption across the industry could have a significant impact for savers and an instrumental impact on the wider Irish economy.

WIDELY ADOPTED

ClearGlass CEO, Chris Sier, chaired the UK Financial Conduct Authority’s (FCA) disclosure group, which pioneered the CTI in 2018 following a review of cost transparency across the asset management industry. It found that asset owners such as pension funds had difficulty accessing the necessary cost information to make effective value for money assessments on behalf of their investors. The CTI has already been widely adopted by investment management firms across the UK, Europe’s largest investment fund market. 80% of UK pension schemes now use the templates, representing an estimated Assets Under Management (AUM) of £1.9 trillion.

Dr Chris Sier, CEO of ClearGlass commented: “With the introduction of the Cost Transparency Initiative, Ireland is now firmly ahead of the European curve on cost transparency within the fund management industry. This is an important development for Irish pension schemes, and we believe the active support of both the Irish Association of Pension Funds and Pensions Regulator for the availability and provision of this data is aligned with the best interests of Irish savers and will ensure the long-term success of this initiative.”

ClearGlass works with over 1,000 asset owners and over 500 asset managers with assets exceeding €1.3 trillion