UK – The Investment Management Association (IMA) has denied that a cosy relationship between fund mangers and brokers is penalising pension funds. In response to the allegations by Paul Myners and economic secretary Ruth Kelly at last week’s NAPF conference that the UK fund management community isn’t doing enough to make its costs structures transparent, chairman of the IMA Lindsay Tomlinson says that the industry has in fact reacted.

“We can already see general changes in behaviour in the industry. Softing is an area that has seen some response, brought on by both the Myners review and government pressure,” he comments.

Tomlinson points out that restructuring transaction costs will be a complicated procedure and the government’s two-year compliance period ending next March is too short.

“Two years is a long time politically but practically it’s not really long enough to establish how much time and resource will be needed to implement new measurement systems,” he says.

Tomlinson says the IMA’s new disclosure code is intended as a means of making a basic comparison between managers. “Ultimately each case is unique, and I think that Myners was trying to say that trustees need to understand why pension funds pay so much in transaction costs.

“They need to open dialogue with their fund managers to ensure the money is being spent wisely or if it could be better spent in other ways. This is what the code is designed to encourage.”