CompaniesAug 7 2014

Red tape costs worry wealth advisory firms: poll

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The cost of regulation remains a big threat to doing business for wealth advisory firms, despite investors valuing the advice they are given, research from Equiniti has found.

According to Mark Taylor, managing director of Equiniti Investment Services, the whole financial services sector, including wealth management and advisory firms, has been facing “increasing scrutiny from the FCA”.

In the 36-page Equinity Wealth management annual report, which provided insight into how the wealth management industry was likely to evolve, the cost of regulation and rising operational costs represent two of the greatest threats to opportunities over the next three to five years.

However, clients using advice valued the support. Mr Taylor added: “It is up to wealth managers to illustrate the value of advice for those who would benefit from it.”

Research involved 100 senior executives and 800 private investors.

25% of unadvised investors regarded wealth managers as “too expensive”.

92% of advised investors think wealth managers’ fee structures are is easy to understand.

More than 50% prefer to communicate by email.

Adviser View:

Chris Williams, chief executive of Bristol-based Wealth Horizon, said: “Technology is key to bridging the investment landscape. It is already part of our everyday lives and many are increasingly looking for advice online. The challenge for wealth managers is to help clients to turn this data into advice that is relevant.”