CMA remedies have ‘not gone far enough’

The Competition and Markets Authority (CMA) has not gone far enough in its proposed remedies for the investment consulting and fiduciary management market, trustees and employers have said.

Attending the XPS Group annual conference last week, 4 October, over three-fifths (62 per cent) of 267 pension scheme trustees and sponsors believed that the remedies will not do enough to make the market more efficient.

In July, the CMA said that a break-up of the market would have “adverse consequences” for both trustees and scheme members, instead suggesting a requirement for pension funds to run a competitive tender when choosing their first fiduciary manager.

XPS head of investment, Patrick McCoy, said: “We believe the CMA should extend the remedy which requires a tender process to take place when appointing a fiduciary manager to include the requirement for the trustees to take independent investment advice.

“We also believe that the splitting of advice and marketing by fiduciary managers should go further so that it requires selling to be done by a different person than the person providing advice.”

At the time of publication, several industry voices felt that the CMA was right in its decision not to propose far-reaching reforms to the investment consultancy market, sighting “detriment to customers”.

Last month, Mercer called the CMA’s findings “flawed” and questions errors in the data analysis used to deliver its findings.

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