Investment - Articles - Additional comments on CMA report on investment consultants


Additional comment from Aon, Cardano, PMI and JLT Employee Benefits on the CMA's report on investment consultants

 Tim Giles, head of Investment for UK & Ireland at Aon, said: “Our key focus is on our clients and their best interests and we believe that the transparency and consistency of performance and fee reporting is a positive step forward to help trustees increase the security of pension scheme members’ benefits.

 “We support competition at the point of entry into fiduciary but will work with the CMA to ensure that the approach to tendering is done in a proportionate way and without any unintended consequences for pension schemes.”

 Andy Cox, Global Business Officer and head of EMEA/APAC, Investment, at Aon, said: “We are not surprised that the CMA has found a competitive market within the investment consulting industry and low barriers to entry. We do not believe that the CMA has presented sufficient evidence to show any adverse effect on competition, nor do we recognise low levels of engagement among our trustee clients. Despite these concerns, the CMA has come forward with provisional remedies and recommendations that we support in principle.

 “Aon will continue to engage with the CMA to ensure that our clients’ best interests are at the forefront of the CMA’s Final Report.”

  

 Commenting on the CMA’s provisional decision in its investigation of the investment consultants market, Richard Dowell, Co-Head of Clients at Cardano, said:

 "It is fantastic to see the CMA progress so many of the remedies required to improve this industry. Following a detailed and forensic enquiry, the pragmatic proposals put forward will bring real and much-needed change.
 
 “The industry will scrutinise these recommendations over the coming weeks and consider how they will benefit the industry at large. It is important that all parties, including the Pensions Regulator, now work together to support trustees in their work on behalf of beneficiaries.

 “The only stone that remains unturned, perhaps, is what the data gathered by the CMA can tell us about the impact of adopting fiduciary management versus advisory. Given the focus on transparency, publication of the aggregate performance data collected through the course of this enquiry would demonstrate whether, as a whole, outcomes have been better for those that chose FM even though the CMA is concerned how the market has developed. That said, this provisional decision delivers a solid 9/10.”

  

 Lesley Carline, President at the Pensions Management Institute commented: “The Pensions Management Institute is pleased that the CMA has taken a pragmatic and realistic view of the provision of both investment consultancy and fiduciary management services. The introduction of mandatory tendering will see a requirement for participants to behave in a more open and competitive manner and this can only be in the best interests of schemes and their members. Perhaps the most significant development is the recognition that trustees require additional guidance when selecting investment consultancy or fiduciary management services, which in turn shows that effective trustee education has a major role to play in improving industry standards”
  

  

 Commenting on the CMA’s Provisional Decision Report on the investment consultants market, Mark McNulty, Head of Investment Solutions, JLT Employee Benefits, said: “The CMA has reached a correct assessment of the issues which need addressing and is right to have dismissed far reaching changes – which were neither needed nor proportionate.

 “The requirement for tendering before awarding a fiduciary management mandate for the first time is undoubtedly a step forward in ensuring better outcomes for customers. Equally, setting a five year timescale for those mandates which had not previously been tendered is consistent and a welcome step. We look forward to a more active, competitive marketplace over the coming years. The other measures to enhance transparency on fees and performance can also only benefit the sector.”

  

 
  

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