The Local Government Pension Scheme Advisory Board will launch a ‘transparency code’ for investment management firms this autumn.
Investment firms serving the LGPS will be encouraged to sign up to the code to demonstrate their commitment to transparency on their fees.
The board has drawn up a form in which participating investment managers can present the costs of their products in a uniform way, which it says will give LGPS funds better clarity on their spending on investment management. The asset managers’ data will then be checked and verified by a third party.
The board has proposed to launch the code in autumn this year, “following a period of consultation with asset managers, the Chartered Institute for Public Finance & Accountancy and LGPS funds”.
Jeff Houston, head of pensions at the Local Government Association, said investment managers had been “cautiously supportive” of the initiative.
He added: “We are working with the Investment Association and hoping the template can also form part of its transparency standard. Also we are looking at how it could be integrated with the Institutional Limited Partners Association template for private equity managers.”
The move comes after the government ordered LGPS funds to reduce their costs through a number of initiatives, particularly the current drive to pool their investments.