Too many asset managers fall short on disclosure

A 'gulf' in behaviour on voting and engagement disclosure has been identified between the best and worst performers among UK asset managers.

An annual report on the matter by the SRI campaign charity FairPensions says that despite an increased public debate about investor oversight, there have only been 'modest improvements' in disclosure, with nearly a fifth of asset managers still failing to disclose any information on voting at all.

The FairPensions report, which is the first since the introduction of the Financial Reporting Council's Stewardship Code in the UK last summer, names F&C and Baillie Gifford as the best performers, while Henderson, Threadneedle, Capital and State Street have made the biggest improvements.

Overall, though, the study of 29 large asset managers concludes that the 'visibility of meaningful information on stewardship activities such as voting and engagement continues to be disappointingly poor for individual members of pension schemes who use the managers in this survey'.

FairPensions recommends, therefore, that the Financial Reporting Council (FRC) institutes a standardized form of disclosure to drive up standards. It says the Stewardship Code, which sets out best practice on a number of voting issues, has already helped to encourage disclosure, but adds that the code should be monitored by an 'Ultimate Owners' Council' which would act 'as a nexus for the interests of beneficiaries'.

Catherine Howarth, chief executive of FairPensions, said: 'The FRC has done well in getting major players in the investment industry to sign up to the code. However, the early evidence suggests a pro-active approach ... will be essential.'