Final step taken in CMA reform of investment consultants

10 Jun 2019 03:40 PM

The CMA yesterday issued its legally-binding Order to help pension trustees make better decisions for £1.6 trillion of retirement assets that they oversee.

This marks the final step of the Competition and Markets Authority’s (CMA) reform of the investment consultancy and fiduciary management sectors, after its in-depth investigation found significant competition concerns.

Investment consultants and fiduciary managers play an important role in ensuring over half of all UK households’ retirement savings are invested wisely. They advise and provide services to trustees that oversee companies’ pension schemes.

Yesterday’s Order requires fiduciary managers – who make investment decisions on behalf of trustees – and investment consultants to provide clearer information about what their customers are getting for their money, and incentivises pension scheme trustees to shop around to make sure they are getting the best deal to suit their needs.

Amongst other things, it requires:

John Wotton, Chair of the investigation, yesterday said:

Millions of people rely on pension scheme trustees to invest their savings effectively – which is why it’s so important that trustees shop around for the best deal for them. Our investigation found that many trustees lack the information needed to assess and compare investment consultants and fiduciary managers, meaning they may not be getting the best value for their members’ money.

By putting the requirements of our investigation into law today, we will increase competition and make sure these markets work better for UK pension beneficiaries.

Trustees, fiduciary managers and investment consultants now have 6 months to ensure their practices are in line with the Order’s requirements – if any are found not to be complying, the CMA could take them to court.

Find more information on the Investment Consultants Market Investigation page.