Investment consultants who advise UK pension schemes will face more stringent rules under proposals outlined by the UK's anti-monopolies regulator.
The Competition and Markets Authority (CMA) has spent nearly a year gathering information on consultants who advise UK schemes after the Financial Conduct Authority (FCA) expressed concern over a number of issues including conflicts of interest and opaque fees.
- Pension trustees selecting their first fiduciary manager must run a competitive tender.
- Fiduciary management firms must provide clearer information on fees and how they have performed for other clients, so that pension trustees have the information they need to make meaningful comparisons between different providers.
- The CMA is also making recommendations for new guidance from The Pensions Regulator, which would provide trustees with more advice on how to choose and scrutinise providers.
John Wotton, Chair of the CMA's Investment Consultants Market Investigation, said: "We're concerned that pension schemes are not currently putting pressure on the market to get the best value for money on behalf of their members. They may lack the information they need to compare competing offers and so could be sticking with their existing investment consultant or fiduciary manager when there are better options available."
"This is an extremely important sector that influences how well millions of people's pension savings are invested, and it's therefore vital we take steps to make sure that competition is working properly. That's why we're proposing a number of important reforms to the sector, including requiring pension trustees to run a competitive tender when they choose a fiduciary manager and ensuring that trustees have much better information about fees and investment performance."
The CMA is inviting feedback on the provisional report up until 24 August 2018.