A report from PIMFA, UK Finance and KPMG UK has outlined the ways in which the Government can support the UK’s Private Banking and Wealth Management (PBWM) sector – helping to deliver growth, provided four key barriers can be addressed.
This comes at a critical time as the Chancellor prepares her growth and competitiveness strategy for financial services.
Based on interviews with chief executives and senior leaders from across PBWM, financial advice and related services, “UK Private Banking and Wealth Management: Harnessing the Sector to Deliver Economic Growth” outlined the reforms required to unlock the sector’s full potential.
The findings reflected a clear industry consensus that the sector is not only equipped but also eager to support the Government’s growth ambitions.
However, this potential will remain untapped unless underlying structural challenges are addressed.
The report outlined four key priorities for reform that industry leaders said are essential to unlocking the sector’s full potential and helping deliver long-term, inclusive growth across the UK economy. These include:
- Fairer and more proportionate regulation: Policymaking and supervision should be more predictable, consistent, and supportive of the industry, along with closer collaboration between the Financial Conduct Authority (FCA), Financial Ombudsman Service (FOS) and Financial Services Compensation Scheme (FSCS), and further promotion of the sector’s positive contribution.
- Embracing innovation and smarter compliance: The sector is increasingly focused on how emerging technologies like AI can enhance client outcomes. With further support to manage compliance costs and strengthen firms’ investment capabilities, there is significant potential for growth. The Government can play a key role by supporting incentives that boost investment and broaden retail participation in financial markets.
- A clearer, more stable tax environment: There is a valuable opportunity to build greater confidence by providing more certain and predictable tax policies and clearer direction. A well-signposted tax roadmap and targeted incentives would encourage long-term saving and wealth-building, attract global capital, and support early-stage UK business growth.
- Strengthening financial literacy: A persistent and critical gap in financial literacy remains a key concern for industry leaders. Improving financial literacy can unlock greater engagement with advice and better decision-making. This can involve embedding financial education across the curriculum and promoting public awareness.
Liz Field, chief executive at PIMFA, said: “We welcome recent signals from government and regulators around growth and competitiveness, but there’s a concern across our sector that without a more stable, proportionate, and joined-up policy environment, we risk missing a vital opportunity to unlock investment, drive innovation and promote greater financial resilience across society.
“Now is the time to go further, faster, and unlock the potential within the wealth management, financial advice and planning sector to unlock the growth we all want to see.”
Eric Leenders, managing director of personal finance at UK Finance, added: “This report provides a clear roadmap for how the wealth management and private banking sector can partner with government to drive growth.
“It also makes clear that if we want more people to benefit from financial advice and long-term investing, we need to remove barriers, modernise regulation and really invest in improving financial literacy.”
Daniel Barry, partner at KPMG UK, said: “While recent Government and regulatory initiatives to promote the sector’s growth and competitiveness are welcome, the report highlights the need to do more.
“But this isn’t just about driving economic growth, it’s about supporting individuals to achieve their financial goals. As risks to the UK’s financial stability are rising, the government has a significant opportunity to instil greater confidence among sector leaders at a time of great uncertainty and geopolitical volatility.
“Policymakers, supervisors and the sector must work together to both safeguard it and deliver growth.”
The Lord McNicol of West Kilbride, Iain McNicol, said: “The Private Banking and Wealth Management sector is a major contributor to UK economic growth.
“It boosts productivity and prosperity, and as such has a vital role to play in advancing the Government’s growth agenda.
“So I’m delighted to see this report put forward a constructive set of proposals for how the sector can contribute further, and to commit to working closely with the government to make this growth a reality.”
