UK: Mercer attacks CMA over “flawed” data

Investment consultancy Mercer has criticized the UK’s competition watchdog for using flawed data in its analysis of the institutional advisory and fiduciary sectors, reported the Financial Times.

Mercer wrote to the Competition and Markets Authority (CMA) last week flagging concerns about the data behind a recent report that highlighted concerns about the competitiveness of investment consultants and fiduciary managers.

“We have several concerns about the CMA’s data analysis. These include the use of incorrect data, errors in the CMA’s analytical code and reliance on unrepresentative samples,” Fiona Dunsire, UK chief executive of Mercer wrote.

Mercer stated it found flaws in the data used to examine how trustees of pension funds are engaged. The CMA found that less engaged schemes pay significantly higher prices than more engaged schemes when they move into fiduciary management with their investment consultants. Mercer, however, claimed there was a “significant error” in the analytical code the CMA used in its work on engagement.

The competition authority embarked on its probe last September after receiving a Financial Conduct Authority (FCA) referral that highlighted “serious concerns” over how investment consultants operate. It marked the first time the FCA had used the referral powers since they were introduced three years ago.

Full Content: Financial Times