Advisers shouldn't worry about the upcoming Senior Managers and Certification Regime as the legislation is “more straightforward” than other legislation they have previously dealt with, according to Nucleus.
Garry Mcluckie, communications director at Nucleus Financial, said advisers had been forced to grapple with a number of regulatory changes over the past few years and SMCR was “smaller” and “more straightforward” than the other policies.
He added: “I’m not worried about SMCR being a problem for advice firms. I haven’t seen any evidence of advisers struggling with it so far.”
SMCR has already rolled out to banks and insurance companies and after December 9 it will apply to all 47,000 companies the Financial Conduct Authority regulates.
Under the regime anyone who holds a senior management function will need to be approved by the FCA and every senior manager will need to fill out a statement of responsibilities explaining what they are responsible for.
Mr Mcluckie said the regime could be boiled down to “no gap, no overlap” for clearly defined roles and responsibilities.
He also thought the guidance put out by the FCA had been good in terms of explaining to firms exactly what was required.
He added: “I’m not saying it’s easy to implement but it’s quite quick to get to a positive place.
“It’s one of those ones that does make more sense — it’s not a complex piece of legislation but it’s an important one.
“If it helps advisers properly understand who is accountable for each of the key areas within their business and clearly identifies that then it can only help.”
David Hearne, director at Satis Wealth Management, also thought most advisers were prepared for the upcoming implementation of SMCR but worried about “one-man and one-woman” advisers.
He said he was concerned about how much regulation would fall upon the individual person under SMCR and make them realise “how many hats they were wearing”.
Mr Hearne said he has hired an operational manager to handle the increased compliance burden created by SMCR and Mifid II and free up time for the other advisers at the firm to deal with clients.
He added: “The worrying thing is that it increases regulation and costs therefore it’s more likely for smaller firms to close, which in general is bad for the advice market and the consumer.”
But Darren Cooke, chartered financial planner at Red Circle Financial Planning, said for small advice firms the new regulation was “absolutely meaningless”.
He said: “All I’ve had to do is go onto the FCA register and tick a box saying I’m officially responsible for all the roles I was already responsible for.
“It’s been an utter waste of time — it’s taken us hours to wade through the legislation and the guides to discover we just have to remain responsible for what we did already.”