I am all for regulation, as I have probably said before, but the raft of new measures, guidance and rules that are besetting independent financial advisers now and in the next few months seem to disregard the fact that we are trying to run businesses.
So, what do we have so far?
• Guidance added to clarify the actions to take where target market information is not available – applicable to both Mifid and Insurance Distribution Directive business;
• The Senior Managers and Certification Regime and senior management functions as well as its impact on training and competence obligations and requirements;
• Regulatory developments;
• The Fifth Money Laundering Directive;
• Guidance added on new obliged entities, register of beneficial ownership, trust registration service and customer due diligence;
• Aggregated disclosure for investment services;
• Further clarification on the position with regards to insurance-based investment products;
• A proposed ban on contingent charging;
• Guidance to provide details on the number of measures the Financial Conduct Authority is proposing to change how advisers manage and deliver pension transfer advice, particularly for defined benefit to defined contribution transfers;
• Data protection; and
• Adviser charging – allowing a client to pay an initial adviser charge over a period of time via their regular premium contract.
This is not an exhaustive list, but keeping up with just some of them has meant additional staff, extra training and work piling up, not to mention the added costs that all this brings. There comes a point when you ask yourself, does this really all lead to better advice for the client?
If we are being stretched just to fulfil all these regulatory obligations, there seems to be only certain solutionsIf we are being stretched just to fulfil all these regulatory obligations, there seems to be only certain solutions; if we take on more staff who need training as well as the existing team, then surely this must also lead to increased costs for the consumer.
Some of this has led to additional premiums in professional indemnity cover for those that can get it, and measures for potential security risks means that what slim resources we may now possess have to be spread even further.
Costs for advice must rise if we are to give clients the advice they deserve.
Marlene Outrim is managing director of Uniq Family Wealth
