The Competition and Markets Authority (CMA) published the final report covering its market investigation into the investment consultancy and fiduciary management markets in the UK on 12th December 2018.
The market investigation has been an exhaustive and comprehensive undertaking that has been helpful in dismissing myths and misconceptions about the industry. The report puts the industry on a strong footing for the future and endorses the value of both investment consulting advice and implementation through fiduciary management.
The CMA’s final report recognises the vital role that investment consulting and fiduciary management providers play in the evolving UK pensions landscape and brings welcome clarity for clients and providers. In particular, the CMA’s The key findings from the final report reflect that:
However, the CMA has concluded there are some market features that impact competition in both the investment consultancy and fiduciary management markets and which may lead to customer detriment. These features include:
In response, the CMA has announced a package of measures to drive further competition, improve levels of pension trustee engagement, and to enhance transparency and service quality across the markets. An order will be published which will:
In addition, the CMA has recommended that more of the activities of investment consultants should fall within the scope of regulation by the Financial Conduct Authority and that The Pensions Regulator should be tasked with oversight of the remedies impacting pension scheme trustees.
The CMA will publish its order detailing the measures within six months of its final report (extendable for four months if there are special reasons) and has indicated that it will be consulting on the contents of the order in early 2019. It is expected that the measures will take effect later in 2019 although the precise timings are not known at this stage.