The Scheme Advisory Board (SAB) for LGPS has awarded a contract to build a web-based platform that will allow comparison of asset managers’ fees and costs.
SAB has awarded the contract to Byhiras, a provider of transparency and governance platforms for investors. The new system will collect data on fees and expenses disclosed by asset managers to pension funds. The new platform will enable data produced by disclosures to be brought together in one place for analysis and comparison.
More than 100 asset managers have so far signed up to the LGPS Code of Transparency to reveal their charges since it was launched .
Cllr Roger Phillips, SAB chair, said the Byhiras platform would allow the code to move to the “next level”.
“Not only will we be able to evidence that signatories are complying with the code, and take action if they do not, but LGPS funds will benefit from a range of reporting which enables them to make best use of the costs and performance data provided.”
Sam Lusty, chief executive and founder of Byhiras, said the new service would help LGPS funds “deliver cost savings and improve investment outcomes.”
Byhiras has been appointed under a public procurement process that began in April. The service will be free to LGPS funds and pools while Byhiras will have the contract for five years. Costs are covered by the SAB levy. The new site will be launched during the first quarter of 2020.
Cost disclosures will be made according to templates developed by the Cost Transparency Initiative, a body created to improve publication of fees and costs for institutional investors.
The SAB began drafting versions of the transparency code in 2017. According to its website, the SAB says: “The Board views the move toward investment cost transparency and consistency as an important factor in the LGPS being perceived as a value-led and innovative pension scheme.
“Transparency is also a target for the revised CIPFA accounting standard issued for inclusion in the statutory annual report and accounts and is included in the government’s investment reform guidance and criteria for LGPS pooling.”
Transparency of management fees has been a long running issue for LGPS and there has been a broad welcome for efforts to improve disclosures.
Karen Shackleton, senior adviser with MJ Hudson Allenbridge, a consultant to LGPS funds, said: “The LGPS Code of Transparency was welcomed by many local authority pension funds when it was first launched in 2017 because it finally provided a level playing field on which to compare manager performance, net of costs.
“The appointment of Byhiras should make it much easier for funds to access and analyse verified data, via one platform. In turn, this will allow pension funds to make a more informed assessment of the true added-value of a manager, over time.”
