Investment - Articles - PLSA responds to FCA on rejecting the UIL

 Caroline Escott, Investment and DB Policy Lead, Pensions and Lifetime Savings Association, commented: Pension funds have £1.9tn of assets under management in the UK, representing 57% of all institutional investments. Both Defined Benefit and Defined Contribution schemes are significant users of the services provided by investment consultants.

 “Investment consultants can play a positive role in the institutional investment chain, adding value for institutional investors and scheme members. However, although some PLSA members have said they are happy with the services offered by their consultants, others have consistently expressed their concerns about the potential misalignment of incentives in the industry.

 “The UIL contained many welcome commitments to addressing the issues highlighted by the FCA as part of its market study. Nonetheless, we believe there is insufficient market coverage or detail within the UIL for it to provide a truly comprehensive solution. The FCA identified issues on both the demand- and the supply- side of what is a complex and evolving market; a Competition and Markets Authority (CMA) investigation could probe competition issues in greater depth and recommend far-reaching solutions. We would therefore support a referral to the CMA and hope such a step would ensure a market which works in the best interests of pension schemes and their members.”