UK’s IMA comes under pressure to reform

Leading asset managers are calling for drastic reform at the Investment Management Association (IMA), the UK’s asset management trade body, with some arguing it should no longer be responsible for sector names or definitions.

Investment Week understands a number of key figures in the asset management space are backing recent proposals from London-based think tank the Centre for Policy Studies, which argues the IMA should stick to being a trade body and appoint an impartial organisation to oversee its sector definitions.

The calls for a fresh approach come as Richard Saunders, (pictured), chief executive of the IMA, announced last week he will step down from his position at the end of the year after an 11-year tenure.

Earlier this month, a draft white paper from the Centre for Policy Studies written by Michael Johnson, who worked as an investment banker for 21 years at J.P. Morgan, was reviewed by the House of Lords. It will be published next month.  

Johnson said the paper has been put together with a ‘coalition of support’ from asset managers and will launch a stinging attack on the IMA, arguing it is ill-equipped to categorise funds.

“The IMA is a trade body and should solely stick to that role, as currently its interests are not aligned with consumers due to it not being an independent organisation. It should put the saver at the centre and not dictate on sector classifications.”

Johnson said the IMA needs to rebuild its reputation after a number of mishaps over the years, including classifying funds inappropriately. He added the Managed sectors are a prime example of an area the IMA failed to get right.

“The research paper has been built on a coalition of support from key personnel in the industry, who agree the industry’s behaviour must change.” In response to the white paper, the IMA said it had conducted a detailed review of the sectors in May last year and concluded they were fit for purpose.

Legal & General Investments is believed to be one group backing some of the think tank’s proposals, arguing the IMA should focus on lobbying on behalf of the industry.

Robin Minter-Kemp, head of investment funds at Cazenove Capital Management, said although he does not take the view sector classifications should be in the hands of a body outside the industry, the IMA should consult more with fund houses.

“There are a number of examples where if the IMA had engaged in more consultation with fund houses, the sector classifications would have been more helpful,” said Minter-Kemp.

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