Spear's Wealth Management Survey

Alan Miller's speech at the True and Fair Campaign

Wednesday, 6th February 2013

Last night Alan Miller spoke about the fee calculator the True and Fair Campaign are launching to protect consumers

We are in the final development stages and on schedule to launch the True and Fair Calculator in March. But today I want to talk about the principles and thinking behind its launch and why we believe the True and Fair Calculator will vastly increase consumer protection and go some way to re-instating the UK as the gold standard in financial services in terms of transparency and honesty.

There are detractors who say you cannot formulate such a calculator but since 2004 American investors have been able to see exactly how their funds are invested on line quarterly, and since 2005 US investors have had access to a fund cost tool that received nearly 1 million hits in its first three years. In 2008, FINRA, the US equivalent to the FSA, launching a ‘fund analyser’ saying that “when investors understand the toll that costs can take on the value of their investments, they can make smarter decisions that will help their bottom lines."

Read more: True and Fair Campaign demands transparency law

This US tool gives investors the end value of funds by allowing them to enter:

a) How much you wanted to invest
b) How long you wanted to invest
c) How much you thought the underlying return before costs might be?

It then allowed you to know how much you would make, not as a % but in $ and allows for different fund comparisons.

We have analysed the US model worked hard on producing new modern calculator based on the principles of True and Fair. There is no reason why UK investors should be treated as second class citizens compared to their US peers.

In the last year, many companies and people have interrogated our methodology in calculating a total cost of investment, available in one number, but none have found it to be inherently flawed. Some of the calculations will be based on standard assumptions so it may not be 100 per cent accurate but it will be immensely superior to the current system.

Research we conducted with investors in January this year found that 74 per cent of the public want to know the costs in one number and most also want this in £ rather than a percentage – such a significant number cannot be ignored.

Instead of hollow excuses we are working towards a practical, robust solution that will quickly and effectively improve knowledge understanding and work towards restoring trust in the savings and investment industry.

Our research shows 62 per cent of adults felt they would invest more money in pensions, savings and investment products, if there was full transparency and clarity in fees.

We are therefore confident that giving genuine transparency will lead to more saving.