Fiduciary duty and clients' long-term interests: UK initiatives launching this Spring

Several initiatives to increase understanding of the issue of fiduciary duty and acting in clients' long-term interests are being rolled out, with NSFM participants at the forefront.

As FTfm reports: "This week the International Corporate Governance Network is launching a Model Mandate at its annual conference, which provides a guideline for asset owners on the best way to formulate a contract to align the activities of their fund managers with their own long-term interests. The contract focuses on areas such as the time frame for investment risk and opportunity, pay, voting oversight and transparency, all identified by the association as points of divergence between owners and managers."

Central to this is the concept of fiduciary duty, a responsibility that draws in both parties. "The aim of the Model Mandate is to provide asset owners with model contract terms which aim to ensure that their fund managers act fully in their long-term interests," explains Paul Lee, Director at Hermes EOS, and an NSFM participant, who chaired the working group which developed the Model Mandate. 

Click here for the ICGN press release in full.

Last week FairPensions called for legislation to clarify what investors’ fiduciary duties are and who should exercise them.

There has been “so much myth and muddle over fiduciary duty that legislation is needed to bring clarity and to help trustees”, says Catherine Howarth, Chief Executive of FairPensions and NSFM participant, quoted in FTfm.

Read the report: 'The Enlightened Shareholder - Clarifying Investors' Fiduciary Duties'

The Kay Review of UK Equity Markets and Long-Term Decision Making Interim Report was released at the end of February. NSFM Director Keith Johnson is mentioned on p44!

Read NSFM's initial submission to the review here.

And last, but definitely not least, Keith Johnson was in London today, 15 March, to chair the NSFM / ICPM Roundtable: Reclaiming Fiduciary Balance for the 21st Century - an event for asset owners and their advisors.

For an overview of the event and to download materials please visit our Fiduciary Duty Working Group page.