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ASA to get its teeth into funds

THE Australian Shareholders Association is expected to put fund managers under the microscope during the next 12 months.

And a special no entry fee deal for ASA members with fund manager Perpetual will be offered within the next few weeks.

ASA chairman Ted Rofe, in Perth last week to address association members, said managed funds was a huge area of growth but unit holders were often not afforded the same protection and rights offered to shareholders in public companies.

Mr Rofe said the ASA board would be following up on the Turnbull Report on managed funds tabled just before last year’s Federal election and would be seeking some of the recommendations.

“Another area in which we will be placing more emphasis is superannuation,” he said.

“In both these areas, managed investment schemes and superannuation, obviously there are a growing number of investors and there’s a growing amount of money invested in these areas.

“We believe that, compared to listed companies, there is a lack of accountability in these areas.

“With public companies you can go along to the annual general meeting each year, you can stare the directors in the eye, you can ask them questions.

“There is not the same opportunity of accountability and questioning in the managed funds.”

Mr Rofe said investors were becoming increasingly aware of the importance of superannuation for their future, so were watching their investments more closely.

“Really, there has been no one representing the interests of investors in managed investment schemes, and in particular superannuation. So we see a growing role for the ASA in that area,” he said.

“To a great extent with the superannuation and investment scheme as an investor you are on your own. The question is in strength in numbers. If you make a phone call it can easily be ignored, but if you are with a group you can get noticed.

“For the foreseeable future our main source of revenue will be through subscriptions.

“In a way that is a good thing because it means that our responsibility remains with our members, and it means that we remain independent.”

Mr Rofe said the board also had considered setting up its own managed fund for the ASA’s members but had decided against it after looking at the requirements and costs.

“We decided it really wasn’t feasible to provide a special fund for our 7,000 members, but we have negotiated an agreement with Perpetual in which they will be providing access to their funds on a no entry fee basis,” he said.

The change in focus follows a review into the ASA’s operations by corporate adviser Henry Bosch, which was commissioned last year.

One of the areas in which Mr Bosch had suggested the ASA could become more involved was the provision of education courses to its members. However, the ASA board has rejected the idea because of the competitive courses already offered by other organisations such, as the Australian Institute of Company Directors, the Securities Institute and the ASX.

Mr Rofe said the cost of developing a course could be about $200,000 – resources the ASA simply does not have.

“Realistically our existing resources are already fairly fully committed to what we do, but that’s not to say that is not something we may look at some time in the future,” he said.

For the moment, however, the board will be reliant on members for funding. With the venture into managed investment schemes and superannuation, the number of potential members available to the ASA will increase dramatically.

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