Event round-up: Transparency Symposium, “The CMA’s Investigation into Investment Consultants and Fiduciary Managers – their Provisional Decisions on Reforms”
Newgate Communications was delighted to host the 21st Transparency Symposium, run by financial services transparency campaigner and founder of the Transparency Task Force (TTF), Andy Agathangelou. The event focused on the Competition and Market Authority’s (CMA) investigation into the investment consulting and fiduciary management sectors, including a presentation from the CMA on its recently released provisional findings.
The UK’s investment consultants and fiduciary managers advise on, or manage, at least £1.6 trillion worth of pension scheme assets.1 Their influence means that it is vital both sectors work for the benefit of the end investor and ensure optimal value for money for British pensions schemes.
The CMA identified several problems in the investment consultancy and fiduciary management markets and proposed a number of changes to boost competition and customer outcomes, and with such transformation in the offing, the event attracted a wide range of decision makers from investment managers and advisers, as well as academics and trustees.
From the outset there was widespread support for the CMA’s proposed actions with the majority of attendees (70%) saying they were ‘just right,’ and the rest calling for them to go further. No one suggested the CMA was being ‘too soft,’ and it was encouraging to see widespread recognition of the need for change.
The CMA’s proposals included mandatory tendering when first moving to fiduciary management, and a requirement for firms to give customers clearer information, such as fees and investment performance. It also called for trustees to set their investment consultants strategic objectives and for firms to report against these.
Many agreed that the proposals will be fundamental in improving transparency in the industry and are long overdue. It was clear that before the CMA’s recommendations are even put into practice, they are already making consultants think differently and improving accountability. However, for the proposals to be properly implemented and for meaningful change to take effect, trustees will need to be equipped with the training and knowledge to deliver.
From a communications perspective, fiduciary managers in particular will face tougher public scrutiny. The drive for transparency and value for money is something that has shaken the fund management industry over the past few years and now regulators are taking measures to ensure behaviours change. As this CMA investigation shows, the investment consultant and fiduciary management industry is facing the same thing. This is all very positive for the end investor, and firms across the board, but they will need to have robust and bold communications strategies to face up to scrutiny and cut through a more competitive market place.
The CMA’s final decision on what action needs to be taken will be made in March 2019.
Please see here for a video of some of the attendee’s views.
1 The CMA, https://www.gov.uk/government/publications/investment-consultancy-market-investigation-summary-of-provisional-findings/serving-uk-pension-schemes-better-provisional-findings-from-the-cmas-investigation-into-investment-consultancy