Investment consultants facing probe by watchdog

Britain’s financial watchdog has ordered the competition authority to carry out an investigation into the investment consultancy industry, which advises on £1.6 trillion of assets.

The Financial Conduct Authority (FCA) said the sector, which advises on pension and insurance assets, is being referred to the Competition and Markets Authority (CMA) after highlighting several issues.

It is concerned that pension trustees relying on investment consultants have limited ability to assess the quality of advice or compare services, and pointed to high levels of “concentration” with the largestthreefirms–hewitt, Mercer and Willis Towers Watson – holding 50 to 80 per cent market share. The FCA also said there are barriers to expansion.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “It is a significant step for us to make this recommendation. We have serious concerns about this market and believe that the CMA is best placed to undertake this work.”