Industry veterans have created what they call a “toolkit” to enable advisers to understand the principles under which the asset management firms, in which they have placed client capital, operate.
Behind the initiative is Bev Shah, founder and chief executive of City Hive, who told FT Adviser: “The industry is good at creating change at companies in which it is invested, but are less good at flipping a mirror onto itself.
"The Action Challenge Transparency (ACT) is a reporting standard to help with transparency, but it is not designed to be a prescriptive yes/no list. There are three pillars to it, looking at the purpose, the vision and the values of the asset management and wealth management organisations. And central to all of those is how people are treated.”
A total of 150 global asset managers have signed up to the list, while the organisation’s stewardship council contains 30 chief investment officers.
Shah said: “Those individuals are not on the stewardship council to represent their firms, they are on it to share their expertise.
"The key is that we are not expecting firms to have all the answers right now, we had a number of asset management houses say to us that they felt they were not quite ready, but the point is they don’t have to be 100 per cent ready now, it is about committing to being on the right road.”
She said the toolkit contains “multiple” diversity and inclusion questions, and also questions around climate issues.
Shah said: “It is likely that a boutique firm may not have lots of policies, but are clear about the direction of travel in which they want to go, then that is great and we want them to be part of ACT.”
She is determined the organisation does not go down the route of providing “ratings” or scores, as she feels, “once that happens, it becomes like a tick box exercise where people can be coached to give the right answer but we are focused on a more qualitiative approach than that".
Darius McDermott. managing director at Chelsea Financial Services said the culture of an asset management firm is relevant when choosing a fund to invest in, "but its a soft factor, because quite often one cannot really now."
david.thorpe@ft.com
