By Simon Jessop and Carolyn Cohn
LONDON (Reuters) - Britain's anti-monopolies regulator on Wednesday laid out a series of planned reforms to the investment consultancy and fiduciary management industry to help fix a range of competition concerns.
The Competition & Markets Authority has spent 10 months gathering information on the sector after markets regulator the Financial Conduct Authority referred it for possible breaches of competition law as part of its own review into asset management.
At the time of the referral, in September, the FCA had said it was concerned with a range of issues, including conflicts of interest and opaque fees.
In its provisional response on Wednesday, the CMA said changes were needed to ensure consultants provide better value for money, both when advising pension schemes on where to invest and also when doing it for them, known as fiduciary management.
"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," said John Wotton, chair of the CMA's Investment Consultants Market Investigation.
"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."
Among the changes proposed were mandatory competitive tenders for pension trustees selecting their first fiduciary manager and deadlines to retender within five years if they have already appointed a manager without doing so.
It also recommended the Pensions Regulator provide trustees with more advice on how to choose and scrutinise providers.
"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," Wotton said.
The CMA said fiduciary management firms must also provide clearer information on fees and how they have performed for other clients.
It also wanted to see greater oversight of the industry and therefore proposed the British government broadens the scope of the Financial Conduct Authority.
Feedback on the provisional decision report is due by Aug. 24.
(Editing by Sinead Cruise and Emelia Sithole-Matarise)
