Trade body PIMFA has called on policymakers to provide greater “clarity, consistency and proportionality” in their communications to the financial advice sector.
The group suggested that while the sector recognises the importance of proportionate regulation, the volume of reforms and lack of clarity in communications are having a significant impact on day-to-day operations.
PIMFA, which represents wealth management and financial advice firms, surveyed 52 of its members and found that 96% agreed that regulatory change is diverting time and resources away from other priorities, with 29% stating that this is happening to a “large extent”.
When asked which regulatory priorities should be at the top of the agenda in the next 12 months, the majority (54%) of firms highlighted the need for clearer and more consistent regulatory communication, ahead of simplified reporting and reduced duplication of returns (48%).
Director of government relations and policy at PIMFA, David Ostojitsch, commented: “The wealth management and financial advice sector plays a critical role in supporting households, businesses and the wider economy, managing over £1.65trn in savings and investments.
“These findings indicate that while our members are committed to delivering the best possible outcomes for clients, the cumulative impact of regulatory change is making it harder for firms to do so, while juggling other priorities.”
PIMFA’s research also indicated that compliance costs are also front of mind, with 79% of firms reporting an increase in compliance expenditure over the past 12 months.
While 54% said they now feel clearer about what is required to remain compliant compared with this time last year, 46% still do not and were unsure about how to best remain compliant with regulatory requirements overall.
“There has been real progress in some areas, and we welcome the work the FCA are doing to improve this burden for firms, but there remains more to do,” added Ostojitsch.
“In line with its desire to be a smarter regulator, we need to see a regulatory framework that is simpler, more proportionate and more consistent for firms to thrive and continue supporting long-term growth in the UK economy.”
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