A new year brings new challenges, and for advisers the challenges of the modern age see them increasingly concerned with regulatory and legislative change.
From the RDR, to pension freedoms, Mifid II and the General Data Protection Regulation, there has been little let-up.
But as 2019 begins, advisers can look ahead and ponder the curious sight of a year with comparatively little on the horizon – in terms of new regulation, at least.
Rory Percival, a former technical specialist at the FCA and now a consultant, says of the coming 12 months: “Advisers might find this hard to believe, but it is quite good news. Advisers keep moaning about regulatory change, and in recent years there has been quite a lot, but it is quietening down a lot.”
That doesn’t mean intermediaries have nothing to wrap their heads around.
Looking ahead, the FCA’s work this year may lay the groundwork for action that could give advisers a headache into 2020. And some of the most significant regulatory changes of recent times are likely to create additional work for advisers again in 2019.
First up is Mifid II. Introduced last January, the one-year anniversary means advisers must start providing their clients with post-sale breakdowns for exactly how much they have spent in fees and charges, and who that money has gone to.
Caroline Bradley, group risk and regulatory director at Tenet, says: “For advisers, if the platforms is doing it for them it makes their job quite easy, but they need to think about the things the platform might have missed.
“It is all about demonstrating value for money. Some consumers may be surprised about costs and charges, but under RDR they should have been disclosing what they are paying already.
“But are they aware of all the bits and pieces of different charges? I am not sure. It might make some of the more expensive adviser groups stand out, and it might cause some clients to shop around and create healthy competition.”
One additional complication is that many of these statements will be in the red for the first time in several years.
Ian Cornwall, director of regulation at the Personal Investment Management and Financial Advice Association, adds: “I think Mifid II has still got to be bedded down. We have got the first round of cost and charge requirements coming and there will be a lot of work there.
“I have no idea whether it will lead to costs being driven down, but it will lead to more transparency in terms of costs.”
Martin Bamford, a chartered financial planner at Informed Choice, is wary of the role to be played by platforms in providing this data.
He says: “With the recent turmoil experienced by several wrap platforms with their technology migrations, I have a fairly low degree of confidence in their ability to get this right in a timely fashion.