Australia urged to improve fund transparency
Australia has been described as one of the worst countries in the world for transparency of portfolio holdings as clients seek more information.
This particularly related to greenwashing and sustainability, an area the Australian Securities and Investments Commission (ASIC) warned it had been looking into for funds and superannuation.
Clients were also becoming more demanding of transparency and funds meeting environmental, social and governance (ESG) standards.
Dugald Higgins, head of responsible investment and sustainability at Zenith Investment Partners, said fund managers and advisers would need to start being more transparent with clients about their holdings.
“Australia is one of the worst countries when it comes to the transparency of portfolio holdings. It’s understandable that full holdings disclosure is problematic if you’re an active fund manager, but it’s also something more clients are seeking.
“The global shift on ESG standards is already happening, and Australia cannot afford to be left behind.”
In Europe, where ESG has been around for far longer than in Australia, advisers must ascertain their clients’ sustainability preferences and match products accordingly. Similarly, advisers in the UK will have to obtain sustainability preferences of their clients during the advice process to ensure product suitability.
Higgins encouraged Australia to use these overseas examples to better navigate the regulatory space and mandate reporting frameworks built around the Taskforce on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board.
“While there are some differing industry views on minor details, none of the many submissions I’ve seen are saying we shouldn’t do it. It’s a pretty safe bet to say it’s happening, so you need to plan accordingly.”
AUTHOR
Laura Dew
Recommended for you
The $673 billion global investment manager has appointed a former Zenith sales head as it seeks to expand its reach in the Australian wealth management market.
Fund managers may be operating in a squeezed environment, but a salary guide shows they are willing to pay up for specialist talent to diversify their fund range.
Reach Alternative Investments has entered into a strategic partnership with Russell Investments to bolster its wholesale private markets offering for financial advisers and investors.
Boutique investment consulting and research house Genium Investment Partners has announced a senior appointment to drive further growth in its research ratings business.
