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Articles 26th Sep 2017

Investment Consultancy and Fiduciary Management market investigation: CMA outlines Issues and timetable

In its first ‘market investigation reference’ ever, the Financial Conduct Authority (FCA) this month referred Investment Consultancy and Fiduciary Management to the Competition and Markets Authority (CMA) for an in-depth 18 month ‘market investigation’.

Following the FCA’s referral on 14 September 2017, the CMA published its ‘Issues Statement’ and Investigation Timetable on 21 and 22 September 2017 respectively.

The FCA had reasonable grounds for suspecting that features of the UK markets for Investment Consultancy services and Fiduciary Management services restrict competition. As set out in its terms of reference, the CMA’s independent and thorough investigation covers the following two markets:

  • Investment Consultancy services: advising institutional investors (predominantly pension funds) and employers on their pension schemes; and
  • Fiduciary Management services: making and implementing decisions for investors (including selecting funds in which to invest).

Investment consultants frequently advise pension funds on strategies for investment, allocating assets and selecting fund managers. They can also manage pension schemes’ investments (‘Fiduciary Management’), advise employers on designing pensions and run pension schemes via in-house ‘master trust’ arrangements.

The CMA’s investigation will ascertain whether features of these markets restrict competition. If it identifies competition concerns, the CMA will decide whether and – if so – what action is needed to resolve them.

The CMA’s Issues Statement establishes a structure for the investigation and posits initial theories on potential ‘adverse effects on competition’ (AECs) and its very preliminary thinking on possible remedies to resolve any such competition issues it finds.

The Investigation Timetable contains a schedule for the investigation, with ‘site visits’ in September to October 2017 and ‘hearings’ in October to November 2017. The statutory deadline for the CMA to complete the market investigation reference is 13 March 2019.

The CMA’s concerns

The CMA is primarily examining whether:

  • customers find it difficult to assess, compare and switch investment consultants, limiting the incentive such consultants would otherwise have to compete for customers;
  • conflicts of interest as regards investment consultants reduce the quality and/or value for money of the services they provide to customers; and
  • barriers to entry and/or expansion limit the number of challengers to pressurise established investment consultants to be competitive, leading to adverse customer outcomes.

For further information on CMA investigations, how to respond to requests for information and how to navigate towards a satisfactory outcome for your business, please contact Andrew Maxwell.


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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