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Susan Edmunds
Susan Edmunds
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Asset managers troubled by regulatory cost

Friday 5th of September 2014

BNP Paribas Securities Services’ latest Asset Administration and Custody Review was undertaken to gauge the industry’s outlook on the changing market, including shifts in investors' appetite, growth in cross-border funds, regulatory changes and increasing complexity.

Head of location NZ Doug Cameron said: “The review found the top issue that keeps those in the industry awake of an evening is government regulation. Two-thirds (67%) are losing sleep over it.”

Almost 90% said they were incurring larger costs because of their regulatory requirements, which could not be easily passed to end investors.

The most concerning operational issue for those surveyed was risk management. Improving risk analytics and the risk-return profile of their portfolios worried more than two-thirds of respondents.

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Latest Comments
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@first time caller - I can see the complexity you highlight, but as above, investors should be able to see what they are paying without having to reference multiple documents. Investment admin can track and report deductions for tax, withdrawals, fees et al, would be /should be straightforward to aggregate advice fees into costs at member level... at least I hope so.
14 hours ago Goldcard
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@goldcard - how would you propose that a fund manager calculates the TER to include adviser fees given not all clients pay them and different advisers charge different fees, not to mention some advisors charge different fees to different clients? The advice fee gets disclosed in the adviser's disclosure statement and the statement of advice, so the client can add that to the published TER of the fund they are invested in to see how much they are paying overall.
1 day ago First time caller
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Schedule 4 of the FMCA regs 2014, particularly clauses 2(1) and 53(3) provide the basis for excluding individually charged advice fees from the statutory TER. This was introduced with the best of intentions, but now it is little more than an invisibility cloak for deductions from member accounts.
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