Britain’s pension industry urgently needs strategic direction, and the Competition and Market Authority’s recent review has simply not gone far enough ( “Demand for choice will drive UK’s pensions revolution”, September 12). Pension schemes continue to face tremendous difficulty when attempting to switch fiduciary managers, as they are hindered by the opaque and obsolete operational design of many traditional fiduciary management models.

Britain’s entire pensions industry needs to address the issue of why schemes fall into these bad structures in the first place. We believe a number of players have purposefully designed portfolios in such a way that they are both expensive and difficult to exit, which is all the more likely to keep a scheme tied to a provider. Exacerbating the issue, we are already seeing many industry players use the CMA findings to their own advantage, with some already speaking about commoditising selection exercises.

This will dumb down the process in order to get through hundreds of retenders rather than take to heart what the CMA has suggested. Trustees need help in making the right decision for their schemes, not a tick box exercise to simply say they’ve re-tendered. And they need to have a real choice to leave their incumbent, without a sword of Damocles hanging over a potential exit.

There is a strong belief that fiduciary management is better for pension scheme outcomes, but we remain unconvinced that current responses to the CMA will make enough of a difference to put the needs of the pension scheme first. Pension schemes — and their beneficiaries — should share that healthy scepticism.

Nikesh Patel
Kempen Capital Management, London EC2, UK

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