"The barriers created by inefficient and burdensome regulation continue to strangle the personal finance sector, thereby restricting consumer access to the financial advice marketplace"
As part of the Personal Finance Society research, three quarters of financial adviser’s identified the impact of regulatory and compliance costs as one of the biggest threats to their business over the next 1-3 years (75%), up from 72% in 2015 and 67% in 2014.
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.
Brexit and a general economic slowdown was the second biggest threat (34%), followed by execution only and online simplified advice (33%).
Complications from implementing EU regulations (29%) and a lack of new talent/available skilled trainees (22%) were also identified as major threats in the short term.
Additionally, advisers were much more downbeat about the short-term prospects for economic growth compared to 2015. Just one in five advisers identified economic growth as an opportunity for their business in the next 1-3 years (21%), down from 40% in 2015.
Conversely, opportunities arising from the Government’s pension reforms were considered the biggest opportunity for advice firms in the next 1-3 years (59%), followed by referrals from professional connections (48%) and higher professional standards (36%).
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.”
