FCA calls for investigation into investment consultant competition

FCA calls for investigation into investment consultant competition”

'Investment consultancy services play a significant role advising pension fund trustees when they are procuring asset management services.

Britain's markets watchdog said on Thursday it has serious concerns about the investment consultancy sector which it had asked the country's competition authorities to investigate.

In the FCA's asset management study, published in June, the regulator requested the power to regulate investment consultants due to concerns about conflicts of interest among these businesses.

Those who wanted to see the CMA get involved in the market were "especially concerned" about conflicts of interest where firms provided both advisory and fiduciary management services, the FCA said. The largest firms in the sector - Aon Hewitt, Mercer and Willis Towers Watson - hold a 50-80% market share and there are barriers to new, smaller consultants joining the industry.

The organisation said competition is not particularly being driven by customers of these services, with pension trustees "relying heavily on investment consultants but having limited ability to assess the quality of their advice or compare services", with this leading to low switching rates. Workplace pension schemes have £1.9tn of assets under management in the United Kingdom and pension schemes represent 57% of all institutional investments.

"We look forward to the outcome of the CMA investigation".

'It is a significant step for us to make this recommendation, ' said FCA director of strategy and enforcement Christopher Woolard.

"It is important that trustees can be confident they are getting good quality advice and value for money from their investment consultants", he added.

The 12 largest consultants influence investments worth up to £1.6 trillion ($2.1 trillion).

This is the first time that the FCA has made a market investigation reference to the CMA, which it can do when it has "reasonable grounds" to suspect any features of the financial services market prevent, restrict or distort competition.

This report confirmed that it was minded to refer the sector to the CMA by way of an MIR.

These three firms joined forces following the FCA's interim AMMS report in November past year, proposing a number of "undertakings in lieu" to improve standards in the sector without the need for a CMA referral.

Andy Agathangelou, chair of industry pressure group the Transparency Taskforce and former board member of fund manager trade body, the Investment Association, described the referral as "momentous".

Like this


14 September 2017
Case against PC George: Women's commission chairperson gets death threat
The Commission had observed that the MLA has been consistently making derogatory remarks about the survivor. I had been receiving the letters for quite some time now, but I was tolerant and did not file a complaint.

14 September 2017
Jacob Rees-Mogg makes another howler live on air
Rees-Mogg added: 'The real reason for the rise in numbers is because people know they are there and Labour refused to tell them'. Responding to his comments on Twitter, former shadow Secretary of State Angela Eagle wrote: 'Oh dear, words fail me'.

14 September 2017
Charge your new iPhone wirelessly with these Qi chargers
As 9to5Mac points out, there are three USB-C wall charger Apple offers on its website, with the cheapest one priced at $49. Meanwhile, the company's most affordable USB-C wall charger, the 29W variant that comes with the MacBook, costs $59 .

14 September 2017
Trump to visit the disaster that Hurricane Irma left behind
Fort Myers sits north of where Hurricane Irma made landfall over the weekend, though the area did suffer some damage. He visited Texas and Louisiana after Harvey struck. "I can tell you the White House has been outstanding".

14 September 2017
Arrested superstar Dileep submits fourth bail plea
Meanwhile It is also learned that Dileep will move HC after knowing the court's stand on Nadhirshah's plea. Police had arrested the prime accused Pulsar Suni and his accomplices a week after the incident.

14 September 2017
AAC reshuffles schedules for 5 teams in wake of Hurricane Irma
The South Florida-Massachusetts game will take place during the 2022 or 2023 season, on a yet-to-be-determined date. The Pirates and Houston will play November 4 instead of October 28.

14 September 2017
Olive Garden all-you-can-eat 'Pasta Pass' is back
Beginning at 2 p.m., diners will have their chance to nab one of the passes - but that chance will only last for 30 minutes. The April trip includes airfare, a hotel, and meals.

14 September 2017
Check Out! Taapsee Pannu Latest Bikini Hot Photoshoot Pictures Photos Pics
But Taapsee, like yesterday, stood up for herself all over again and thrashed the hater with this tongue tying reply. . She sarcastically said that if she had a brother, she would surely ask him, but for now, she could ask her sister.

14 September 2017
First look at Jennifer Lawrence in glamorous new spy film Red Sparrow
After enduring the perverse and sadistic training process, she emerges as the most risky Sparrow the program has ever produced. When she suffers a career-ending injury, Dominika and her mother are facing a bleak and uncertain future.

14 September 2017
Airplanes to spray Houston area for mosquitoes starting tonight
To keep mosquitoes out of the home, people should make sure their window and door screens fit tightly and are in good condition. Harris County is working with our partners at the Texas Department of State Health Services (DSHS) and the U.S.