The Competition and Markets Authority (CMA) has taken its first steps towards imposing a suite of remedies for the investment consulting and fiduciary management markets.
The watchdog has published a draft order containing provisions relating to mandatory tendering for fiduciary management, and disclosure of fees and performance information to current and prospective clients of investment consulting and fiduciary management firms.
The order follows the publication of the CMA's final report in December, which included a conclusion that the markets contained competition issues, particularly among firms which offer both investment consulting and fiduciary management services (IC-FM firms).
It also concluded that trustees did not have enough information to make well-informed decisions, and that those more engaged - via tendering, for example - often received services at a lower cost.
Divided into 11 parts, the order deals with the majority of the recommendations made in the final report, as well as some more general provisions around enforcement and reporting.
Once enacted, immediate action will be required on the use of a standardised methodology and template for reporting of fiduciary manager's past performance; and obligations on trustees, and firms providing either or both of fiduciary management and investment consulting services to provide compliance statements to the CMA.
The remainder of the remedies will come into force six months later, although schemes will be given up to five years to re-tender for an existing fiduciary management mandate, and those with existing mandates exceeding five years will also enjoy a two-year grace period.
The order also outlines that the remedies requiring trustees to take action will not apply to public sector schemes - as defined in section 318 of the Pensions Act 2004 - or master trusts where an IC-FM firm is a scheme strategist or scheme funder under The Pensions Regulator's authorisation regime.
Industry participants are encouraged to provide feedback on the draft order with a deadline for responses set as the morning of 13 March.
The CMA has previously indicated it plans to enact the order by the end of June.
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