3 February 2016

Navigating the Increasingly Complex Regulatory Environment as an IFA


Keeping up with changes in laws and regulatory requirements has always been a serious issue to contend with, whatever the business sector. The more complex the regulatory environment, the greater the challenge businesses face to keep abreast.

Navigating the Increasingly Complex Regulatory Environment as an IFA

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A single change can have a serious knock-on effect. Existing staff may be subject to extra training to increase the minimum level of competencies. Extra qualifications may be required. Internal procedures may need to be revised to accommodate new legislation or regulatory rules. This in turn, may result in increased workloads or changes to the roles of existing staff to ensure compliance. Internal systems may need to be modified, or new systems may need to be developed to help handle new requirements efficiently and effectively – which again, may require more training.

Compliance Is the Greatest Concern

Failure to keep up and comply with changes in regulations as well as the penalties that can result, have been shown to be one of the major headaches for advisors in the financial industry. There has been no shortage of surveys and reports over the years showing that staying compliant is their top concern. One of the more recent polls, in 2015, by Investment News, showed that 38 per cent of the 544 advisers surveyed considered heightened regulation, disclosure and compliance as representing the greatest risk to their businesses in the future. Challenges related to attracting new clients came in second, at 23 per cent.

Automated Compliance Tools and Streamlining

For the smaller IFAs, adapting to regulatory and legislative change can sometimes be an even greater challenge, which is why services providing back office systems for financial advisers can help alleviate the pressure of maintaining compliance. Typically, these systems provide a seamless approach to client management, from marketing, through regulatory reporting, to fees and income tracking, supported by back office services such as payments and views of clients’ portfolios. One example of such a system can be found on the Intelliflo website among others.

The commitment to ensuring the systems are responsive to ongoing regulatory and legislative changes allows IFAs to adapt more smoothly, thus allowing them to retain the focus on their business. More importantly, the flexibility in keeping up to date with changes in the regulatory environment means these systems can offer protection against compliance risk.