On the 18th of March, FBC hosted an Executive Governance Roundtable, a digital event exclusively for functional leaders and senior executives to share insights and best practice. The session drew together more than 25 senior product governance leaders from FBC’s corporate membership to discuss the emerging trend of assessing value in crossborder markets – with two excellent case studies of value reporting for Irish and Luxembourg fund ranges from Richard Vincent at First Sentier Investors and Clare Wood at Columbia Threadneedle Investments.
The wide-ranging discussion that followed at FBC’s roundtable explored how the UK’s Assessment of Value (AoV) initiative is influencing firms to think more broadly about value assessment across their fund ranges, in Europe and further afield. Although the pressure to make these changes is not yet coming from the regulator, there is an emerging direction of travel here, underlined recently in the press with news that Schroders is considering expanding their value review to their European fund range.
For crossborder funds, expecting a replication of the UK’s Financial Conduct Authority AoV reporting is probably unwise because as FBC’s Philip Warland pointed out, the impetus for this initiative is more likely going to be intermediary and client-led, a point echoed by product specialist and FBC member Jean-Francois Hautemulle. Denise Voss, an experienced Luxembourg iNED, speaking in a personal capacity, said that whatever shape and form this took, assessing value was to be welcomed.
The consensus emerged over the course of the meeting that European regulatory bodies are not looking to replicate the UK’s FCA mandated AoV regulations, but rather carve their own path, putting the end investor, from a value, cost, fees and performance perspective, in a central position in firms’ thinking. As a result of these client-centric product reviews, scrutiny of share class value has also emerged as a vital component of value analysis.
Could we soon find ourselves in a situation where EU funds sold into the U.K. need to produce an AoV report? Watch this space, as a senior governance leader from Invesco mused, speaking at an Association of the Luxembourg Funds Industry (ALFI) event recently.
For more in this topic, join us for FBC’s Digital Meeting on 20th May at 2pm, when we’ll be exploring whether cross-border funds should have to produce an AoV report and the implications of just such a move.