Final Investment Consultancy and Fiduciary Management Market Investigation Order Published

The U.K. Competition and Markets Authority has published the final Investment Consultancy and Fiduciary Management Market Investigation Order 2019. The Order imposes legal obligations on pension scheme trustees, investment consultancy firms and fiduciary management providers, implementing the CMA's remedies to its finding of an adverse effect on competition in both the investment consultancy and fiduciary management markets. On February 11, 2019, the CMA published a draft Order for comment, and the responses to the draft Order have been published alongside the Order.

Among other things, the final Order requires:

1. Pension scheme trustees to carry out a competitive tender before awarding a fiduciary management mandate of 20% or more of their scheme assets for the first time. Fiduciary management firms are prohibited from accepting a mandate from a customer subject to competitive tender obligation unless the customer has confirmed that it was competitively tendered.
2. Requiring investment consultancy firms that also offer fiduciary management services to separate their marketing of fiduciary management from their provision of investment consultancy advice. The Order also sets out mandatory wording that must be used in all marketing material provided to pension scheme trustee clients.
3. Requiring investment consultancy firms and fiduciary management providers to report the performance of any recommended asset management products and their own investment products, where such reporting is not already a regulatory requirement.
4. Requiring fiduciary management providers to disaggregate fees for existing customers, including providing enhanced disclosure of underlying investment fees.
5. Requiring fiduciary management providers to provide more information about their fees to prospective customers, including costs relating to transition or exit.
6. Requiring fiduciary management providers to report their performance track record to prospective customers using a standardized methodology.
7. Requiring pension scheme trustees to set strategic objectives for their investment consultant before receiving investment consultant services.

View the final Order.

View details of the CMA's Final Report.

View further details on the Investment Consultancy and Fiduciary Management Market Investigation.

Return to main website.