"We have serious concerns about this market and believe that the CMA is best placed to undertake this work", he said.
The FCA can make these references to the CMA "when it has reasonable grounds to suspect that any features of a financial services market prevent, restrict or distort competition".
The regulator said it was also concerned about barriers restricting smaller, newer consultants from taking market share, and that "vertically integrated" business models were creating conflicts of interest.
The regulator, the Financial Conduct Authority (FCA) said that pension funds had "limited ability to assess the quality of their advice or compare services", meaning that switching rates were low.
Advice from the 12 largest investment consultants affects £1.6trn of assets in the United Kingdom, mostly held in pension funds.
Christopher Woolard, executive director of strategy and competition at the FCA, said: "It is a significant step for us to make this recommendation".
Une femme de 97 ans se fait voler ses lingots d'or à la banque — Paris
Deux individus se sont présentés mercredi vers 17h à son domicile dans le 16e arrondissement de Paris. Cette pauvre femme de 97 ans a été victime de voleurs sans aucun scrupule.
Some investment consultants reiterated to the FCA that they have processes in place to ensure asset managers' gifts, hospitality or revenue from providing services did not affect their advice while others argued the outings and presents they received were "insignificant and declining".
Commenting on the move, head of defined benefit pensions at investment consultancy Redington Dan Mikulskis said that he welcomed the move as it would give clear guidance and focus for the industry, which would provide "focus on ensuring that competition is working effectively for end customers".
"It is important that trustees can be confident they are getting good quality advice and value for money from their investment consultants", he added.
In response, the so-called "Big Three" acted to attempt to avoid this measure by offering the FCA a package of undertakings in lieu (UIL) of the MIR "to address its concerns". However, it can not be right that the future direction, structure and regulation of our industry is driven by its participants.
Tim Giles, a senior partner at Aon Hewitt, said: "We welcome the clarification that the investigation covers the breadth of our industry and look forward to a constructive engagement with the CMA".
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