The cost of compliance could rise for advisers and wealth managers, Phil Orford has warned.
The chief executive of the Forum of Private Business said regulatory fees and the costs of auto-enrolment, which will be rolled out to all small companies, were “key drivers” of rising business costs.
He said these would hit all businesses, including advisers and wealth managers, adding: “Government often underestimates the impact of regulation on businesses, so it is no wonder small firms are getting increasingly concerned about the cost of pension auto-enrolment, which by its very nature is going to be hugely expensive to set up, deliver and maintain.”
His comments followed research by the FPB, which showed a 4 per cent increase compared with 2013 – equivalent to a total cost of compliance of £19.2bn.
Smaller businesses in particular have been hit the hardest, with the compliance bill for those with fewer than nine employees being the equivalent of £164 per employee, almost seven times the cost for companies with 50 or more staff.
Adviser view
Joss Harwood, co-director of Durham-based Eldon Financial Planning, said: “Working, as we do, in a highly regulated environment, we are all too familiar with ever-increasing compliance costs.
“Small organisations in all sectors not used to such micro-management will inevitably have added direct costs and time cost for auto-enrolment. But arguably, better pension provision for workers should have been embedded in UK business long before now.
“The figures quoted per employee even for the smallest companies are not huge and if companies have sensitivity to costs at this level, they may not be robust businesses anyway.”
