However, they said it will not happen all at once, and it is unlikely there will ever be a single global standard – making compliance for those companies doing business across borders a continuing challenge.
This picture of a more transparent world emerged as the executives addressed questions about such issues as high commission levels in the offshore market, compared with levels in the UK, where the retail distribution review has made fee transparency a way of life since it took effect seven and a half months ago.
Transparency is also beginning to be introduced in some other countries, including Australia, Hong Kong, and Singapore.
John Van Der Wielen, chief executive of both the UK and international divisions of Friends Life, was among those who said transparency in the international markets would help to bring commission levels down, and was generally a good thing.
Van Der Wielen made his comments during a roundtable discussion of senior executives from six of the largest international life companies.
However, some, including Royal London 360° chief executive David Kneeshaw, noted that a low headline commission level could hide other charges and fees that, if added up, could end up being a less-good deal for the client.
“I’m not so sure that you can simply say ‘commission levels are too high’” without taking other factors into account, he said.
“Some may not be [too high], if the advice is really good.”
What’s more, other parts of the distribution chain had to play a part in bringing about changes to the charging structure, as it was “not pragmatic” for all the pressure to always be on the life companies, particularly as they are not all based in the same jurisdiction, Kneeshaw noted.
Axa Wealth managing director Mike Foy agreed that it was unfair of regulators to burden the life insurance industry as much as it has, or seem likely to in the future, with the job of policing the global financial services industry.
Other parts of the financial services industry should play a greater role, he said, while the global life insurance industry needs to get more involved earlier in helping to shape legislation affecting it – rather than “sitting back and doing nothing until it is too late”.
Increasing regulation was also a central theme a little later, when five fund management company executives discussed the future of offshore fund distribution. Noting that there was a growing "global issue around investors getting a better deal advice-wise and product-wise", Nigel Whittingham, the recently-resigned managing director of Morningstar OBSR in the UK and Ireland, said the way typically being found "to drive that, through regulation, is focusing on advice and remuneration".
In response, "life companies tend to say,’right, let’s build a strategy which helps these guys to conform with the [new] regulations," Whittingham added.
"And from my point of view, as an asset manager, I would definitely be wanting to be involved in that process."
The Fund Links Forum, now in its eighth year, brings together industry executives from the international funds and life insurance industries. This year’s forum was the largest yet and was held at the Corinthia Hotel, near Whitehall in London.
