UK: Pension Scheme Investment – A New Era Of Increased Competition?
Recent intervention by the Competition and Markets Authority could lead to increased competition in the market for investment professionals who provide services to pension schemes – which should be a good thing for the employers supporting those schemes.
Many occupational pension schemes use the services of investment consultants and / or fiduciary managers. Broadly, investment consultants advise pension scheme trustees on how best to invest scheme assets – and fiduciary managers make investment decisions on behalf of pension scheme trustees.
While it is the pension scheme trustees who engage these investment professionals, it is generally the employers who ultimately bear the cost.
In December 2018, the Competition and Markets Authority (the “CMA”) published the findings from its investigation into investment consultancy and fiduciary management services, and also published the remedies.
To the extent that the remedies lead to increased competition in the market, this should help to cut costs and improve investment performance for pension schemes.
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