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Striking a balance on profits and compliance

Regulatory change is occurring at a remarkable pace as the FCA strives to ensure the advice market better serves the needs of its customers.

This shift in gear by the regulator has meant some firms have struggled to hit the right balance between their commercial objectives and maintaining effective compliance. Firms should address the following key areas to ensure resilience in the face of such change:

  • Business model sustainability: Responding to market change requires a sustainable business model that can adapt while continuing to deliver against the firm’s commercial objectives. This is underpinned by effective governance, with senior management taking appropriate steps to ensure robust controls are in place
  • The right culture: In the face of significant regulatory change it can be tempting to make minor changes at the edges of the organisation. To ensure the firm has the ability to adapt to future change, underlying cultural issues must be addressed so it continues to deliver positive consumer outcomes
  • Value for money: The definition will vary across consumer groups and markets but this comes down to providing products and services that deliver value at a cost the customer is willing to pay. To achieve this, firms need a thorough understanding of their customers’ needs, supported by robust management information to demonstrate those needs are being met.

Colin Wilcox is technical director at TCC


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. It might help if adviser firms were given some respite from the endless storms of regulatory change. Not much chance of that though, any more than there is of the FAMR making a scrap of difference to the affordability of advice.

  2. “Value for money: The definition will vary across consumer groups and markets but this comes down to providing products and services that deliver value at a cost the customer is willing to pay.”

    So the definition of value is delivering value providing the client is willing to pay. Very insightful, thanks…

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