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Compliance tops business challenges for advisers

Platform costsCompliance is the main business challenge for advisers who struggle to foot the bill for expensive ways to keep ahead of regulatory change, Fidelity figures show.

Research from NextWealth and Fidelity Funds Network found 80 per cent of advisers place compliance ahead of increasing business efficiency, improving technology and recruiting staff on their list of main problems.

NextWealth managing director Heather Hopkins says independent and restricted advisers, both appointed representatives and directly authorised, are affected.

She says: “There is a continuing trend that we can see in these figures that shows advisers are finding it difficult to respond to the amount of regulatory change happening across the industry. That includes a range of issues and ties into their other major concern, which is back end-technology and business efficiency.”

Thirty-two per cent of adviser respondents cite back office administration as their primary business challenge.

The research says: “Back office administration can be a real headache for many financial advisers and it is closely related to the challenge of the compliance burden.

“As the cost of delivering advice increases, it becomes critical for advisers to increase efficiency and they are increasingly concerned about it as they try to maximise time spent with clients and minimise their paperwork.”

A total 29 per cent of respondents voted business management as their main concern, including issues with hiring and training suitable staff and succession planning.

A quarter of advisers say stock markets and geopolitical risk is currently the major concern to business.

Hopkins says: “It’s not just Brexit coming up and Trump or US politics, though we hear plenty around that as well. It’s about being answerable to clients and needing to communicate to them about investing for the long-term and making those difficult decisions.”

Changes in investor behaviour and sentiment will also have a spill-over affect to how advisers balance client expectations.

The research says: “Clients have become accustomed to stable and growing markets and worry about meeting clients’ needs in bumpier times and with potential market losses.”

Head of Funds Network Jackie Boylan says: “There is a lot for advisers to consider and get there head around and it’s a minefield. The landscape and what the FCA expects is always developing and its important advisers have systems and processes in place to rely on.”



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There is one comment at the moment, we would love to hear your opinion too.

  1. Yes I wholeheartedly agree with this article, but the main problem is its got counterproductive, there is no real benefit for the client having to do things 3 or 4 times across various different mediums (verbal, recording, paper, email etc etc etc) all it serves is regulation …. another stone on the path to trip over, another barrier.

    Don’t even get me started on the cost (for the clients) for the colossal amount of extra time one has to spend on all this nonsense.

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