The Financial Conduct Authority has “serious concerns” about a market dominated by Aon Hewitt, Mercer and Willis Towers Watson, which hold a 50-80 per cent share.
It is the first time the FCA has made such a reference to the Competition and Markets Authority.
The FCA’s executive director of strategy and competition Christopher Woolard said in a statement: “We have serious concerns about this market and believe that the CMA is best-placed to undertake this work.”
He added: “Investment consultancy services play a significant role advising pension fund trustees when they are procuring asset management services.
“It is important that trustees can be confident they are getting good quality advice and value for money from their investment consultants.”
Tim Giles, partner at Aon Hewitt, said in a statement: “Throughout this process we have made it clear that we want to achieve the best outcomes for our clients and scheme members, helping to drive down the costs and increase the value of asset management.”