Question to the HM Treasury:

To ask His Majesty's Government whether they intend to adopt the Competition and Market Authority’s recommendation of December 2018 to make investment consultants advising on pension funds subject to regulation by the Financial Conduct Authority; and if so, when.

The principal finding of the Competition and Markets Authority’s (CMA) 2018 Investment Consultants Market Investigation report was that the investment consultancy and fiduciary management market was insufficiently competitive, leading to adverse impacts for their customers. One of the recommendations of that report was that investment consultants should be brought into Financial Conduct Authority’s (FCA) regulation.

In the March 2019 response to the recommendations of the CMA’s final report, HM Treasury committed to consulting on the CMA’s recommendation that the FCA’s regulatory perimeter be extended to cover the activities of investment consultants. A number of other priorities, including the urgent work required to respond to the Covid-19 pandemic, meant that the work to develop this consultation has been delayed.

However, a number of other recommendations made by the CMA to address competition in this market have been taken forward, such as the Department for Work and Pensions’ legislation requiring pension scheme trustees to carry out a competitive tender for fiduciary management services.

HM Treasury works closely with the FCA and has held regular discussions with them on this matter.