LONDON (Reuters) - Britain’s competitions watchdog will look into the advice given by consultants to pension schemes and other institutions managing over 1.6 trillion pounds of funds, to see if there are conflicts of interest, it said on Thursday.
The Competition and Markets Authority (CMA) will assess whether investment consultants offer a poor level of service and whether difficulties comparing and switching consultants provide little incentive for them to compete for customers.
In addition, it will investigate if there are barriers to entry into the investment consultancy sector, it said in a statement providing more detail on the probe it launched last week.
The CMA’s investigation follows a referral from the Financial and Conduct Authority, as part of the financial watchdog’s broader effort to improve value for money and transparency in the asset management industry.
The CMA probe will be chaired by John Wotton, one of its designated inquiry chairs, the CMA said.
“It is extremely important that the investment consultancy sector works effectively for its clients, which include many of the UK’s biggest pension funds,” Wotton said.
Reporting by Carolyn Cohn; Editing by Elaine Hardcastle