mast image

Impact Investing

IPE special report May 2018

Sections

UK roundup: CMA seeks trustee input for consultants inquiry

Related Categories

The Competition and Markets Authority (CMA) is to carry out a telephone survey of pension scheme trustees as part of its research into the UK’s investment consulting industry.

The CMA was requested by the Financial Conduct Authority (FCA) last month to launch a formal competition inquiry into provision of investment consulting and fiduciary management services.

The Pensions Regulator has provided contact details for roughly 7,000 trust-based schemes, the CMA said on its website. Market research specialist firm IFF Research has been employed by the CMA to conduct the survey.

Separately, Aon Hewitt has written to the CMA challenging some of the FCA’s concerns that triggered the inquiry.

In a letter published on the CMA’s website last week, Aon Hewitt’s head of UK investment consulting Tim Giles said his firm faced competition “from a wide range of providers for all aspects of our services”. He highlighted Hymans Robertson and Redington in particular as being “comparable in size” to Aon in the UK, and pointed out that asset managers had also entered the fiduciary and consulting sectors in recent years.

“Barriers to entry are low and competitors can and do readily enter the market,” he said. Giles also argued that “most pension trustees we work with possess the requisite experience and are well-placed to evaluate investment consultants” despite the FCA’s concern that trustees did not have sufficient skills in this area.

Farmers’ fund awards £100m fiduciary mandate

Russell Investments has been awarded a £100m (€113m) fiduciary management mandate by the National Farmers’ Union of England and Wales Staff Pension Scheme.

The decision was prompted by a “detailed strategic plan” set out by the scheme, said Ken Sutherland, director of finance and business services and secretary of the union.

Jim Leggate, head of UK institutional and Middle East at Russell, added: “With trustees’ time under increased pressure, there is a need to consider delegation.”

NEST adds to investment adviser panel

NEST, the scheme set up by the UK government to meet auto-enrolment demand, has appointed Hymans Robertson to its panel of investment advisers. The decision means Hymans is able to pitch for advice contracts along with other members of NEST’s closed pool of advisers.

In a statement, the consultancy firm said it was appointed after “a thorough procurement exercise assessing the quality of its advice and people, as well as cost”.

Mark Fawcett, NEST’s CIO, said Hymans had shown “significant innovation” in the defined contribution sector in recent years. 

Regulator launches asset manager authorisation hub

The FCA is to provide a range of support tools and services to new entrants to the UK’s fund management sector.

The regulator today launched its asset management authorisation hub, offering startup providers services such as pre-application meetings, a dedicated “case officer”, and access to an online portal.

The FCA emphasised that the hub “will not lower entry standards to the market and entrants will need to meet the same rigorous standards as current firms before they receive authorisation”.

It follows the announcement earlier this month that the government had set up an asset management taskforce of chief executives, investors, the FCA and policymakers. City minister Stephen Barclay said the group would “discuss how government, industry and the regulator can work collaboratively to stay competitive and deliver for investors”.

Redington’s plan for ‘honest conversations’ on governance

In other consulting sector news, Redington plans to open a governance tool to the wider market. It follows research carried out earlier this year in collaboration with Chris Hogg, the outgoing CEO of Royal Mail Pensions Trustees, which found that 95% of consultants agreed “honest conversations” were essential for improving scheme governance.

Paul Richards, head of governance and decision research at Redington and leader of the governance service, said improving communications and feedback could have a more immediate impact than other ideas currently being considered in the UK, such as consolidation.

“Something that is within our power right now is for chairs of [trustee boards] to ask for feedback and for advisers to give it, even if it might be uncomfortable,” Richards said. “You need to get challenging issues on the table, but have the ability to provide solutions that are supportive, workable and consider the perspectives of other advisers and stakeholders.”

Related images

  • St Paul's Cathedral, London

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2436

    Asset class: Real Estate - Core Open-ended Real Estate Equity Fund (non-listed).
    Asset region: Asia Pacific.
    Size: Approx. CHF 70-100m per investment.
    Closing date: 2018-05-25.

  • QN-2438

    Asset class: High Yield Bonds.
    Asset region: US.
    Size: USD 300 million.
    Closing date: 2018-05-25.

  • RE-2441

    Closing date: 2018-05-31.

Begin Your Search Here