CMA probe may test consultants’ funds buy-lists

Under_review_fileInvestment consultants may be further scrutinised for their ability to choose the best-performing asset managers and funds.

The UK’s Competition and Markets Authority (CMA) said it may take earlier research by the Financial Conduct Authority (FCA) on this issue even further.

The new research, should it happen, will form part of the CMA’s probe into the UK investment consultancy industry that has resulted from the FCA’s Asset Management Final Report.

An issues statement from the CMA has been published that details the industry review and names the committee leading the investigation.

The FCA previously found that investment consultants, on average, were not able to identify asset managers that offer better returns for investors, the CMA said in its statement.

“[The FCA] conducted relatively comprehensive quantitative analysis in this area, which we intend to examine in detail,” said the CMA. “We are considering whether to extend this analysis, for example by updating it to include 2016/2017 data and including ‘negative’ recommendations and we welcome views on whether this is necessary and likely to be informative.”

Negative recommendations covers funds and products that pension schemes have been told not to buy.

The CMA investigation group is to be chaired by John Wotton, one of the CMA’s designated inquiry chairs. The other panel members are Lesley Ainsworth, Bob Spedding and Tim Tutton.

All the appointees are chosen from the CMA’s pool of expert independent panel members, who come from backgrounds including economics, law, accountancy and business, the CMA said.

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