Regulatory costs threaten more advisers

Regulatory costs threaten more advisers

The cost and uncertainty of regulation is the biggest threat to the success of financial advice firms, according to a Personal Finance Society survey.

As part of the professional body’s 2016 Member Survey, three quarters of financial advisers said the impact of regulatory costs was one of the biggest threats to their business in the next three years

At 75 per cent this was up from 72 per cent in 2015 and 67 per cent in 2014.

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It is the fifth year in a row that regulation and compliance costs have topped the survey’s list of major concerns facing the financial advice profession.

PFS chief executive Keith Richards said: “Despite the efforts of regulators and government, through the introduction of the Financial Advice Market Review, to assure the sector that it will tackle regulatory barriers and costs in order to help increase access to advice, it is clear there is more to be done through the introduction of tangible change.

“The barriers created by inefficient and burdensome regulation continue to strangle the personal finance sector, thereby restricting consumer access to the financial advice marketplace, leaving millions unprotected and left to fend for themselves.

“As the FCA and government continue to consult on key proposals resulting from last year’s FAMR, I’d urge them to act on the feedback and pragmatic solutions offered by the sector on how best to address the barriers, and introduce meaningful change which will in turn assist millions of consumers in their long-term life planning.”

Brexit and a general economic slowdown was the second biggest threat identified by PFS members surveyed at 34 per cent.

Just one in five advisers identified economic growth as an opportunity for their business in the next 1-3 years, down from 40 per cent in 2015.

Meanwhile 33 per cent identified execution only and online simplified advice as a major threat to their business, up from 22 per cent in 2015.

More than 1,600 PFS members responded to the survey, which was conducted between 11 October and 8 November.