CMA Investment Consultants Investigation response

Press release 19 July 2018

CMA Investment Consultants Market Investigation

Mike Faulkner, CEO of River and Mercantile responds to Provisional Decision report

"We welcome the findings and in particular we would draw out a few key conclusions.

The report supports the broadening of the FCA's remit in relation to investment consultants. On this issue, we would go further. We believe it is essential for investment consultancies to submit to full FCA regulation. We have done so since the inception of our investment consulting activities in 2001 and consider that the disciplines it requires are highly supportive of good client outcomes. We also consider that advice on the appointment of Fiduciary Managers should be similarly regulated by the FCA.

The CMA has identified appropriate performance standards and total fee disclosures as a key area of necessary improvement in the fiduciary management industry. We strongly support these measures, and have historically always provided clients with clear performance against liability driven objectives. We have similarly provided a complete breakdown of all fees. Both measures are critical in an effective fiduciary management partnership.

The CMA supports the idea of competitive tendering in relation to Fiduciary Management, where a client is either adopting for the first time or where the initial appointment was not competitive. We have stated openly for a long time that this would be a good thing for the industry and believe it will be positive for client outcomes.

The CMA has not suggested splitting advisory and fiduciary activities, for a variety of reasons. We believe this is an appropriate decision because it affords clients a choice of how to engage with their investment partner, where this is something they consider valuable. Many of our clients have valued being able to adapt their governance model with us as their circumstances have changed. We therefore believe the CMA has taken the right approach in maintaining choice for clients.

Overall, we are highly supportive of the CMA's report and findings and look forward to working with them, alongside the FCA and tPR, to ensure broad industry adoption."

Ends

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Notes to editors:

About River and Mercantile

River and Mercantile Group operates through four principal divisions: Investment Solutions, encompassing both advisory and fiduciary management; Derivative Solutions, providing structured equity and LDI; Equity Solutions, providing both UK and global equity strategies; and the Multi Asset division, providing Dynamic Asset Allocation and other multi asset based solutions.

River and Mercantile Group has assets under management of £34bn as at 31 May 2018.

For further information, please contact:

MRM: Chris Duncan

Director

020 3326 9907