VAPS - Value Assessment Product Solution

UK Fund Managers are required to assess whether their funds are giving investors good value on an annual basis. It is called ‘Value Assessment’ or ‘Assessment of Value’ and began in 2019 with the first reports being published in January 2020.

The third wave of reports have been issued now, and Cooper Wood & Associates are uniquely placed to help Fund Managers and Non-Executive Directors meet their regulatory responsibilities and meet the increasing challenges that are faced.

CHALLENGES:

Value Assessments are resource hungry and carried out by the Fund Manager themselves. This means that they are taking a lot of people away from day to day activities and importantly, they are effectively ‘marking their own homework’ as there is no independent review being done.
Based on the Value Assessment reports already issued and reviewed by Cooper Wood & Associates, there are very few examples of any material remedial action being taken as a result of the report. Given the objective is to assess the overall value of the fund for their investors, it should be expected that there would be any number of remedial actions being taken as a result. This is generally not the case.
In a recent survey by CFA UK, the quality of Value Assessments was heavily criticised across the board and for example, it was reported that 42% of funds failed to state the ongoing charges at an individual level.
Non-executive Directors have increasing responsibilities in their role, and in particular, regulatory responsibility to ensure that Value Assessment is taken seriously, completed properly by the Fund Manager, and that it represents an accurate reflection of value for their investors.
NEDs have become only too aware that to discharge their duties as expected by both Boards and the FCA, requires a forensic mindset, an extensive level of expertise, and a significant investment of time.
The FCA originally set out seven criteria that firms need to consider when conducting their value assessment, including performance, cost and value of service. Cooper Wood & Associates expects the FCA to increase their focus on Value Assessment in the coming months and have already publicly stated that they do not think there was enough competition in the advisory market.

HOW COOPER WOOD & ASSOCIATES CAN HELP:

If you are a UK Fund Manager:

We can perform an independent audit of your Value Assessment process and reporting to provide detailed analysis and feedback on its quality and effectiveness, along with a market comparison for benchmarking purposes.
We can identify areas that require action plans and remediation (including any you may have already identified) and manage them to completion in a timely and complete manner.
We can advise you on process efficiencies and improvements to reduce the amount of resources required to produce Value Assessments.
We can help to embed Value Assessment into the culture of your firm and integrate the philosophy of ‘value’ into business as usual across your business.
We will provide you with an ‘independent certification’ that you can use to demonstrate the enhanced level of attention you have applied, for your clients and the regulators.

If you are a Non-Executive Director:

We can advise you on what you should be looking for, how to interpret the results and what items of a Value Assessment you should be focussing on in your role as a NED.
We can support you with specific knowledge and expertise to enable you to challenge the process and results, and to manage the best outcomes from any remediation plans.
We can help you integrate ‘value’ into Board culture and increase understanding and awareness of Value Assessment across the Board.

The Cooper Wood & Associates VAPS team is led by our industry experts, Mark Friend and Nick Emmins. They have extensive, direct and industry leading experience in managing Value Assessments and also as a Non-Executive Director.

With this unique experience, backed by the rest of the Cooper Wood team, we are able to help UK Fund Managers make material improvements to the process, remediations, outcomes and NED responsibilities.