Earlier this week, the industry body representing financial advisers claimed the biggest worry among its membership was regulation.
The Personal Investment Management & Financial Advice Association’s (Pimfa’s) annual research found 79 per cent of bosses at advisory firms were concerned with the sheer scale and burden of implementing European regulation this year.
Mifid II, GDPR, Priips and other delightful acronyms have caused advisers and their compliance teams plenty of headaches – and will continue to do so, given the FCA’s chief executive made strong comments last week that enforcement action was on the cards following a ‘grace’ period over Mifid II.
While tough new laws are often needed, and the motive behind recent regulation – the protection of consumers – is laudable, I can understand why advisers are sometimes left agog by the lack of actual change these seem to create.
On the one hand, fees and suitability and not cold-calling people are being heavily legislated against; on the other, large advisory and wealth management firms seem to be defying the rules, with hefty, sometimes opaque charging structures, or ‘factory gating’ potentially vulnerable consumers.
It’s right to take opportunities in business.
It’s right to make a profit – but at whose expense?
While some firms are taking great pains to adhere to the letter and the spirit of these laws, others just seem to be able to keep to the letter while wholly abusing the spirit.
But I am reminded of what my old editor used to say when I often lamented: “It’s not right!” He would say: “It may not be right, but it’s not illegal.”
What a pity morality isn’t a legal requirement.
Simoney Kyriakou is deputy editor of Financial Adviser