Not only is the association currently completing a merger, it has taken on new chairperson, Helena Morrissey, announced the departure of regulatory affairs officer Julie Patterson and it will also adopt a new name as of next year.
The restructuring of one of the investment industry’s most recognisable associations signals a new era for the IMA, reflecting ongoing changes in the industry. Regulation is becoming increasingly sharper in all areas of investment. And, through the acquisition of the British Insurers Investment Affairs arm (ABI), the IMA will be able to provide a greater coverage of the industry.
For investors, the restructuring highlights a few key developments that provide insight into the industry.
Evolution
The IMA as it is known today was formed in 2001, with name change effective from February 2002, following the merger of the Association of Unit Trust and Investment Funds (AUTIF) and the Fund Managers Association. Prior to that, AUTIF had been founded in 1993, preceded by the Unit Trust Association established in 1959.
In April, the IMA announced that it had agreed in principle to merge investment activities with ABI, forming a new trade body. While the respective memberships of the ABI and IMA will continue as they are, the new organisation embodies a stronger and more unified voice and the collective will of its members to work together in the interests of the industry.
“One of the reasons behind the merger was that a number of firms had separate memberships to both trade associations. The merger means that together we cover the entire range of investment issues on behalf of our clients in one place, whether they are domestic or international individuals, discretionary managers, life companies, pension funds, family offices or sovereign wealth funds,” a spokesperson for the IMA said.
It has been 12 years since the last stage of the association's evolution of the association, and the intervening years have seen significant changes in the industry.
The scope of the Investment Association, which the IMA will be called as of 2015, has expanded to include areas which were previously not covered such as segregated mandates, portfolios for insurance companies or retirement schemes for larger clients that are not necessarily open to other investors. Thus the organisation will bring together funds as well as those institutional portfolios such as insurance and pensions.
“The association will be able to provide a stronger, more clear and coherent voice in investment matters, and cover a broader investment front,” IMA chief executive Daniel Godfrey said.
“We will be able to engage directly with companies and provide additional services, while at the same time continue dealing with regulation, the annual asset management survey and the consumer education work which the IMA is known for,” he added.
One of these additional services is the Institution Voting Information Service (IVIS) supplied by ABI. It reviews the accounts of the UK’s 300-400 largest companies, writing reports for its subscribers and identifying issues. It also looks at the quality of the stock market for investors.
“For example, we will look at an IPO which includes the fees paid to banks, shareholder values, and situations such as lock-ups where shareholders promise not to sell shares for a certain time after a transaction,” Godfrey said.
The association’s figure of £788bn of funds under management relates to investment funds and is still the most up to date figure it has available, according to the IMA. It would not be altered as a result of the merger. According to a spokesperson, total AUM represented by the IMA now stood at £5trn as of 31 December 2013.
“We will be producing our May statistics in due course, but again these will not be impacted by the merger with the ABI's Investment Affairs division,” a spokesperson said.
Implications
The association will be doing what it says on the tin, according to Jason Hollands, managing director of Bestinvest.
“One thing that has become apparent in recent years is the amount of regulatory change. Speaking in a single coherent voice in the UK should strengthen the association’s situation. It now speaks collectively for industries bringing together pooled funds and segregated mandates.”
A sceptical opinion was voiced by Gina Miller, founder of SCM Private and the True and Fair Campaign, who said the merger did not fill her with confidence.
“Creating a giant industry body with a louder lobbying voice and deeper pockets does not equate to improving consumer protection,” she said.
The new changes for the association are expected to be implemented fairly quickly following the completion of the merger on 30 June. The merger with ABI was a “lift and drop” situation, according to Godfrey.
“We expect to be up and running immediately when the ABI team moves into the new desks, as long as we have functioning computers and phones,” he said.
On the departure of Julie Patterson, he remarked: “nobody can replace Julie”. He said the association was looking to recruit, but remained open on whether it would be a like-for-like replacement.
Change
The restructure and expansion of the IMA offers a few clues on the current environment of the investment industry. A stronger voice that includes new areas of the industry reflects the need for clarity on increasingly complex regulation, as well as the merging of industry sectors which previously were more segregated. With a new chairman and the regulatory affairs role open, the IMA could also see potential new changes in its leadership as it evolves in the next half year.
