The Investment Association has published a paper which provides new proposals to improve the transparency and delivery of costs associated with investing in a fund.

The paper Meaningful Disclosure of Costs and Charges is aimed at regulators, government, the asset management industry, and investors and their representatives. It examine all explicit and implicit costs incurred when investing and sets out how they should be disclosed to the end investor "in a meaningful way".

“The Investment Association is setting out the building blocks for good disclosure in the context of a complex and evolving domestic and European regulatory landscape," said Daniel Godfrey, CEO of the Investment Association. 

"The industry is working with government and regulators to build a framework for comprehensive, meaningful and consistent information that that can be made available across the whole investment and pensions market for the end investor.” 

The trade body proposes a new methodology for a consistent basis of calculation for Portfolio Turnover Rate (PTR). It also proposes that investors would be told whether the PTR is high, medium or low for a fund relative to other similar funds and how this relates to the transaction costs.

To allow for consistent disclosure across all investment products, including pension schemes, The Investment Association has created a framework and template for the disclosure of charges and transaction costs. This is intended as a foundation for good disclosure and will need to be developed in compliance with forthcoming UK and EU regulation in this area.