How to Fix the Fund Industry

Can a new initiative from the Investment Association fix what ails actively managed funds in the UK? 

Christopher J. Traulsen, CFA 13 May, 2015 | 3:18PM
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On April 28, the Investment Association (IA) released a statement of principles to which it has asked its members to sign up. The initiative is a good one and aligns with the stewardship principles that Morningstar has espoused for more than a decade.

Both are focused on ensuring that fund investors’ interests come first, and that asset managers’ interests are aligned with those of investors.

I would argue that this is simply good business. If an asset manager puts its own interests before those of its clients or otherwise gives them a bad experience with its funds, they may have near-term success, but the durability of the business is questionable.

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About Author

Christopher J. Traulsen, CFA  is director of fund research, Europe and Asia, Morningstar.