The Competition & Markets Authority investigation into Investment Consultancy and Fiduciary Management services in the UK is long overdue and is welcomed. When we consider Trustees of pension funds have a responsibility to make investment decisions that deliver sufficient returns, it is clear that one of the most challenging parts of the role is dealing with the investments.


Legislation requires guidance to be sought from investment specialists which means the investment adviser is integral to the process. With the vast sums under management, how does the Trust board work out they are receiving value for money?

This is even more of an issue with Fiduciary Management where the products are complex and the fees are often less than transparent. The proposed changes including better information on fees with reference to Fiduciary Management should go some way to assisting Trustees with gaining transparency on what exactly they are being charged.

Standardised performance reporting is relevant for both Investment Advisors and Fiduciary Managers. It is much easier to read and understand reports where one can count on some common features and where the end user had been considered in the creation.

The requirement by Trustees to set their investment consultant strategic objectives upon which they must report should be helpful. This will, however, require Trustees to spend more time and increasing parts of their governance budget on meeting this. Regulation of Investment Consulting and Fiduciary Management by the FCA is another welcome development. It seems surprising that this is not the case already. We look forward to the form of regulation this will take. The mandatory tendering for switching into Fiduciary Management and warnings when its been sold, should assist the Trustees in asking the relevant questions as they consider making these important, costly decisions.

The intention that the Pensions Regulator provides new and increased guidance when tendering for both services should mean Trustees will now have access to more guidance.

It is important to note that when Trustees delegate to a Fiduciary Manager, they remain ultimately responsible.

Fiduciary Management has a place in the investment landscape, the challenge for those making the offering is how it is done. Investment Advisors and Fiduciary Managers were expecting a real shake up of the industry, instead they received a gentle rap on the knuckles. Let’s hope they take this as a signal and elevate serving their clients as the first priority. The expectation is that all of the above proposed changes should assist the Trustees to carry out their duties to work in the best interests of scheme members. With greater transparency, the possible increased governance budget may be more than made up from the savings accruing once these changes are embedded.

As Trustees we welcome this investigation and anticipate the CMA’s final decisions


Shola Salako
Trustee Representative – Dalriada

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