The UK’s wealth management and financial advice sector has called for clearer, more consistent regulation as firms warn that the cumulative impact of reforms is diverting resources away from client service and business growth.
According to the inaugural PIMFA Regulatory Insights Tracker, which surveyed 52 member firms, almost all respondents (96%) said regulatory change is taking up time and resources that could otherwise be devoted to other priorities.
Almost a third (29%) said this was happening to a “large extent.”
More than half of firms (54%) identified clearer and more consistent regulatory communication as the most pressing priority for the next 12 months, ahead of simplified reporting and reduced duplication of returns (48%).
The survey highlighted the mounting costs of compliance.
Nearly eight in 10 (79%) firms reported an increase in compliance expenditure over the past year.
Although a slim majority (54%) now feel clearer about what is required to remain compliant, 46% said they remain uncertain about the best way to meet regulatory requirements.
Consumer Duty is dominating compliance activity across the sector, with 85% of firms citing it as the single requirement demanding the most time and attention.
Customer vulnerability was the next most pressing focus, identified by 52% of respondents.
Looking ahead, just under four in 10 (39%) said that proposed reforms around Targeted Support and Simplified Advice would help them deliver better outcomes for more customers.
David Ostojitsch, director of government relations and Policy at PIMFA, said: “The wealth management and financial advice sector plays a critical role in supporting households, businesses and the wider economy, managing over £1.65 trillion in savings and investments.
“These findings indicate that while our members are committed to delivering the best possible outcomes for clients, the cumulative impact of regulatory change is making it harder for firms to do so, while juggling other priorities.
“There has been real progress in some areas, and we welcome the work the FCA are doing to improve this burden for firms, but there remains more to do.
“In line with its desire to be a smarter regulator, we need to see a regulatory framework that is simpler, more proportionate and more consistent for firms to thrive and continue supporting long-term growth in the UK economy.”
