The FCA has confirmed its decision to refer the investment consultant sector to the Competition and Markets Authority for investigation.
The FCA first flagged its concerns in its asset management market study, including the potential for vertically integrated business models to create conflicts of interest.
It also outlines today it believes there is a weak demand side in the market, where trustees have only a limited ability to assess advice quality or compare services despite relying on them heavily.
The FCA had rejected proposals offered by Aon Hewitt, Mercer and Willis Towers Watson – who the FCA is concerned have between 50 and 80 per cent market share – to avoid investigation.
Strategy director Christopher Woolard says the decision to refer the market is a “significant step” for the regulator.
He says: “We have serious concerns about this market and believe that the CMA is best placed to undertake this work.”