In December 2018, the Competition and Markets Authority (CMA) published the findings of its review into the UK's investment consultancy and fiduciary management markets.
The CMA's review drew attention to a number of problems which pension schemes face when procuring fiduciary management. These include a lack of transparency around providers' fees and performance, an ‘incumbency advantage' enjoyed by some providers when selling fiduciary management to schemes which already use them as an investment consultant, and in some cases the use of steering tactics to facilitate this movement from an advisory relationship to a fiduciary one.
To address these problems, the CMA put forward several remedies in its review: measures like mandatory tendering, disaggregation of fees, and standardised performance reporting, which they hope will promote greater competition, improve transparency and increase trustee engagement when they become law next year.
But what do trustees (particularly those of DB pension schemes) make of the CMA's review?
To find out, Professional Pensions conducted a piece of industry research, sponsored by Goldman Sachs Asset Management, which examined three key questions.
- Do trustees support the CMA's decision to conduct a review?
- Do trustees share the concerns identified by the CMA?
- Do trustees support the CMA's proposed remedies?
The research started with a series of six qualitative interviews with some of the industry's leading professional trustees, before moving into a large quantitative survey which was answered by more than one hundred pension scheme trustees.
To find out what trustees said, simply download our report "Return to Tender"
In the last part of this Q&A series, PP speaks to GSAM's head of UK & Ireland institutional client business, David Curtis, about his views on the CMA's review into the investment consultant and fiduciary management markets, and the results of our joint...
PP speaks to BESTrustees director Heather McGuire about her views on the CMA's review into the investment consultant and fiduciary management markets.
PP speaks to Dalriada Trustees' Hugh Nolan about his views on the CMA's review into the investment consultant and fiduciary management markets.
PP speaks to CBC Pension Services' Michael Clark about his views on the CMA's review into the investment consultant and fiduciary management markets.
PP speaks to Punter Southall Governance Services' Wayne Phelan about his views on the CMA's review into the investment consultant and fiduciary management markets.