The former goalkeeper insists David Moyes does not need to make any new signings in January but instead believes the Scot should prioritise selling underperforming players
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With champions United struggling to maintain pace in the race for the title, Moyes has been advised to enter the transfer market when the window re-opens in January.
But Schmeichel - who won the Premier League five times in an eight-year stint at Old Trafford - believes that is not necessarily the best way to proceed, urging Moyes to lay down the law by removing players who are not performing to their full potential.
Speaking to talkSPORT, he said: "What I think is really important to David Moyes is maybe not bringing players in, but letting players go.
"It is very important he stamps his authority on the squad and some of the players that are there are not performing well enough, and it has been going on for a while.
"It would be much better for the club if he brings one or two of the younger players through and lets one or two go."
United travel to Villa Park to face Aston Villa on Sunday.