An organisation that represents 300 pension schemes providing for over 17 million people has raised concerns about the asset management market and backed the FCA to inspect it more closely.
The National Association of Pension Funds has submitted its views to the regulator about changes it wants to see made on some aspects of the sector.
The body cited the prevalence of non-disclosure clauses in fund management agreements as "unhelpful to the proper functioning of a competitive market".
The NAPF's submission also drew attention to the issue of custodial services, an area with significant barriers to entry and an increasingly narrow range of providers.

{desktop}{/desktop}{mobile}{/mobile}

Yesterday, the FCA said it would consider undertaking a market study into asset management and related services later in the year.
Will Pomroy, the NAPF's policy lead on corporate governance, said: "It is crucial that pension funds, as clients of the asset management industry, are able to have trust in the industry and be able to assess whether they are extracting value for money from their agents in the interests of their members – future pensioners.
"Presently pension funds receive many ancillary services from a narrow pool of providers commonly bundled in with core custody services.
"This means it is often difficult for funds to assess whether value for money is being achieved. What is clear is that there is limited innovation and often insufficient focus on client needs in this sector, and to that end we welcome the FCA's signal that it may take a closer interest in the competitive dynamics in this market."
The FCA yesterday announced plans to launch its first wholesale market study into investment and corporate banking to assess whether competition in the sector is working properly. It signalled its intention to consider to looking at the asset management sector alongside as part of this announcement.
The Institute of Directors has also called for a probe into the fund management industry, saying the FCA should make this its priority.
Reforms to bring about greater transparency and clarity around pay, fees, stewardship and voting record are required, the organisation said.
The IoD, which with has about 35,000 members in the UK and overseas, suggested the fund management sector should be given greater importance than the investment and corporate banking sector in the regulator's thinking.