Three tips to help advisers overcome the growing compliance and regulatory mountain
Recent research conducted by FundsNetwork* revealed that 80% of advisers consider compliance or regulation among their top three business challenges, with almost half (49%) naming compliance burden as being their number one challenge.
London, 28 March 2019: Recent research conducted by FundsNetwork* revealed that 80% of advisers consider compliance or regulation among their top three business challenges, with almost half (49%) naming compliance burden as being their number one challenge. Furthermore, it is expected that compliance procedures will come under increased scrutiny from the FCA this year.
With this in mind, Fidelity’s FundsNetwork offers some practical solutions for advisers to help them meet their regulatory and compliance obligations:
Keep it simple
Simplifying processes and clearly defining roles within the firm can go a long way when it comes to better managing compliance and regulatory requirements. Stripping processes down to the bare necessities and streamlining them into simple, easy to understand procedures will help advisory firms not only become more efficient but will also help achieve more consistent outcomes for clients. This can make regulatory reporting easier.
The process of defining roles and responsibilities is also key to ensuring that no essential regulatory or compliance steps are missed, and everyone is aware of the responsibilities and what they are accountable for. This goes hand and hand with having clear, simple processes that are applied to every client case therefore reducing the risk of error or misunderstanding.
Keep a trail
Advisers should be encouraged to take advantage of reporting tools offered by platforms and fintech providers. For example, many enhanced reporting solutions were developed in the wake of MiFID II, with the intention to help companies comply with the new regulation. Using these tools can help firms to be compliant whilst also reducing the need for manual processes thus improving efficiency.
It is also good practice to have an audit trail of all communications. Technology can be a great help with this too and can help to cut time and cost spent on auditing and reporting that could be better spent with clients.
Integration is your friend not your enemy
With compliance and regulations changing all the time it often feels like trying to keep up with moving goalposts - therefore, why adapt business practices to a new rule one day only to have to change it again the next?
The more firms can do to integrate regulatory requirements into the way that everyday business is done, the easier it will be to embed these practices and remain compliant. For example, when first introduced, call recording was a significant burden but now it is embedded in most firm’s practices.
Furthermore, by integrating such practices at the outset, it will also make any future adaptations easier to implement.
Jackie Boylan, Head of FundsNetwork comments; “With the industry evolving and changing at the pace that it is, certain challenges are bound to present themselves. That being said, when it comes to regulatory and compliance challenges, by implementing some simple, strategic actions, advisory firms can lessen this burden substantially for themselves.
“We, at FundsNetwork, are committed to supporting financial advisers in understanding and ultimately overcoming the regulatory and compliance burdens that they face. As part of this commitment we, with the help of ongoing feedback from advisers, want to shape our platform to deliver the necessary services, tools and guidance to help them address the evolving regulatory challenges so that they can spend more time servicing their clients. Our ‘Compliance matters’ web page for example, provides digestible summaries of key regulatory changes to help advisers stay ahead of the regulations.”
Heather Hopkins, NextWealth adds: “We all know that regulation is needed to protect investors, but advisers are feeling the strain of increased costs to comply and are also frustrated by constantly moving goalposts. Many of the advisers that we spoke to in our research complained that the volume of disclosure is making it harder to engage clients with their investments. Keeping things as simple and consistent as possible within a firm and keeping a trail can help firms feel protected. And steps by providers to better integrate data and systems should help to reduce the regulatory burden.”
For further information, please contact:
Press Office Address: Fidelity International, 25 Cannon Street, London, EC4M 5TA
Notes to Editors:
* The research, ‘Business Challenges facing financial advisers,’ surveyed 206 advisers asking them what they consider to be the biggest business obstacles for their industry.
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