The U.K. Financial Conduct Authority (FCA) on Thursday called on the U.K. Competition and Markets Authority (CMA) to examine the market for investment consultancy and fiduciary management services.

The FCA has the authority to make this kind of recommendation when it suspects that a market may be inhibiting competition, but this is the first time that it has used this power.

Last year, the FCA issued a report on the asset management business, which highlighted concerns with the investment consulting area, including: conflicted business models; high market shares for a handful of dominant firms; barriers to new entrants; and, pension trustees relying heavily on consultants, but with limited ability to assess the quality of their advice, or to comparison shop their services.

The FCA is now going ahead with the referral to competition regulators. “It is a significant step for us to make this recommendation. We have serious concerns about this market and believe that the CMA is best placed to undertake this work,” says Christopher Woolard, executive director of strategy and competition, FCA, in a news release.

“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,” he adds

The FCA notes that the 12 biggest investment consultants provide advice to institutional investors that control around £1.6 trillion of assets. And, the largest three investment consultants (Aon Hewitt, Mercer and Willis Towers Watson) control more than half of the advisory market, it says.