At long last, we’re starting to see serious coverage of transparency issues in asset management in the UK press. For many years, it’s been blogs like mine, The Evidence-Based Investor, and groups like the Transparency Task Force and the True and Fair Campaign, which have kept this subject in the spotlight. Now, thanks mainly to the FCA’s damning report on competition in asset management and the introduction of MiFID II, it’s a common topic for discussion in the weekend money sections.
This is a huge step forward — not just for consumers, but also for those asset managers (and they do exist) that are transparent and that do put the interests of their clients ahead of their own. But why have we still not seen the fund industry properly investigated on primetime television? Why has Panorama, say, or Watchdog, not yet looked into the true impact of fees and charges on our investments, or the way that fund performance is reported?
Well, an article by Lesley Curwen in the latest Transparency Times helpfully sheds some light on this issue. Lesley is a highly experienced business reporter for the BBC. In her article, she explains how she first encountered the drive for transparency in early 2015, when she met my fellow campaigner Dr Chris Sier, while conducting a BBC Radio 4 File on 4 investigation into the problems of local authority pensions.
Curwen describes that meeting with Dr Sier as “a light-bulb moment”. His “force and passion while explaining the many hidden costs of pension investing,” she recalls, “rather took me aback”.
She goes on: “It seemed incredibly important to me to make a programme that tackled this head-on, to reach the average listener and make clear to them what the compounded effects of fees and charges could do to their precious savings.
“I also knew it would be hard to get such a programme commissioned as BBC editors often deem such subjects dense and dull.”
And with that sentence, she hits the nail on the head. She’s quite right — this is a very big deal. Here we have a vast (and vastly profitable) industry that has a huge impact on our lives. Most people know the approximate price of a pint of milk, a loaf of bread or a litre of diesel. Yet when it comes to investing, one of the biggest expenses we incur over our lifetimes — in some cases the biggest — people have little clue as to how much they’re paying and what sort of value, if any, they’re receiving in return. If any issue warranted serious coverage on television, this is it.
But it’s a not a conventional news story. For a start, it has been going on for decades. It’s also a complex subject and aspects of it aren’t particularly exciting. This is one of the reasons it took so long for newspapers to take an interest. Readers want to be entertained. They like reading about “star” fund managers who’ve outperformed their peers or the latest “must-have” stock, sector or asset class. They don’t want to get their head around the fact that they’re probably paying far more than they actually need to save for their retirement.
I’ve encountered this problem at first hand myself. When, six years ago, during production of my first documentary about investing, I returned from the US with a clutch of interviews with the likes of Jack Bogle, Dimensional’s David Booth and the Nobel Prize-winning economist William Sharpe. I tried to interest the news desk at Sky News, where I worked as a freelance, in covering the transparency story then. My colleagues were polite enough, but how could it possibly compete with the daily deluge of financial news stories that make for better headlines?
The good news is that Lesley Curwen did persuade her editors at the BBC to tackle transparency, albeit on the radio, in a documentary called The Transparency Detectives for Radio 4’s In Business. The episode is still online, and if you haven’t already done so, I encourage you to listen to it. There’s also a slightly different version for BBC World Service Radio, which looks in more detail at the drive for transparency in the Netherlands.
I salute Lesley and other journalists in the BBC who I know are working hard to bring these crucially important matters to the public’s attention. Realistically, though, a major investigation on the small screen is still a long way off.
He is the founder of Ember Television, which provides content and social media management for companies worldwide, and which has specialist expertise in the financial services sector.
He also blogs at The Evidence-Based Investor and at Adviser 2.0, is an Ambassador for the Transparency Task Force, which is working with politicians, regulators and the asset management industry to make investment fees more transparent and easier to understand.
Robin is a member of the Chartered Institute of Journalists and was a Visiting Media Fellow at Duke University in North Carolina.
He is based in Birmingham UK and lives in lives in rural Warwickshire with his wife and two children.
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