Some investment consultants are being accused of “spinning” the Competition and Market Authority’s (CMA) findings from its investigation into investment consultants and the fiduciary management market to trustees.

In a stark warning for trustees, XPS Pensions head of investment, Patrick McCoy, said that some advisers have “spun it so hard they have forgotten the key messages” and trustees need to “wake up and smell the coffee”.

In December, the CMA published its final report on its Investment Consultants Market Investigation, suggesting that pension schemes must run a competitive tender before choosing a fiduciary manager for more than 20 per cent of its assets, in order to drive up standards and lower costs across the industry.

However, McCoy believes that some consultancies that were guilty of this 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.

“The client wouldn’t have a clue about what the CMA review says because they have spun it so hard, they have forgotten the key messages. So the difficulty is those trustees who are being advised by those who are being accused of this bad behaviour, are still being advised by those people.

“So they have to get a good understanding of what the CMA is saying, rather than take the biased view of what their investment advisers have given them. I hope they wake up and smell and the coffee, because they really need to.”

Last week, members attending the Transparency Taskforce Symposium suggested that trustees should be subject to a “minimum standard” for tendering, to stop schemes paying lip service to the CMA’s new requirements.

McCoy added: "We hope that trustees have finally got the message that they need to think about this. The CMA has been really clear and the danger is that those that have been undertaking this behaviour have got a real smack on the knuckles from the CMA."

EY advisory services manager, Jonathan Craddock, said: “The only thing I would be slightly concerned about is the mandatory re-tender of the schemes which haven’t done it in the first place, whether there is going to be a minimum standard for that, or whether it is just going to be a box ticking exercise.

Despite this, McCoy said that the suggested remedies are a “good outcome” for the industry.

The CMA is set to consult of the draft order of its remedies in mid-February, with a view to finalising the order at the end of March.

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