The Competition and Markets Authority (CMA) has published its draft order of its suggested remedies into the investment consultant and fiduciary management markets.

The watchdog released the draft order on Monday, 11 February, and a consultation will now run for three weeks before the order is finalised at the end of March.

In December, the CMA published its final report, confirming that pension schemes must run a competitive tender before choosing a fiduciary manager for more than 20 per cent of its assets, and if already delegated they must do so in the first five years.

Furthermore, investment consultancy firms will have to separate their fiduciary management marketing and advice to “remind pension scheme trustees of their duty to tender”.

Trustees will also be required to set strategic objectives for the scheme, after the watchdog found that “below average” quality firms had higher market shares that “above average” quality firms.

The CMA has a statutory deadline of 11 June 2019 to implement the remedies.The order would come into force six months after that in December 2019.

Speaking at the Transparency Task Force Symposium January, CMA assistant director, Corina Donohoe, said that the deadline was so tight because it needed to notify the European Commission, giving them 60 days to respond on the remedies that go slightly beyond the current MiFid requirements.

As well as the proposed remedies, the CMA made a recommendation to the Department for Work and Pensions to pass the required legislation to enforce the remedies, as well as recommending the expansion of the Financial Conduct Authority’s regulatory perimeter to capture the main activities of investment consultants.

It has also the CMA said it was working with The Pensions Regulator to give trustees guidance.

In January, a number of industry commentators suggested that there should be a minimum standard for tendering put in place, in order to stop schemes paying lip service to the new requirements.

Furthermore, some investment consultants were being accused of “spinning” the CMA’s findings, “so hard that they had forgotten the key messages, and that trustees need to “wake up and smell the coffee”.

XPS Pensions head of investment, Patrick McCoy, said that some consultancies that were guilty of the uncompetitive behaviour have now started to advise clients on what the CMA review says.

“The problem is, those that have been undertaking that behaviour have also now started to advise their clients on what the CMA review says. I’ve seen some of their press releases, if you want to laugh, look at some of the press releases, compared to what the CMA review said, and you’re like, wow,” he said.

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