Top five challenges facing financial advisers around the world
By International Adviser, 14 Oct 16
Financial advisers name the challenges facing the future of their businesses, from poor market performance and a challenging regulatory environment, according to a survey by Natixis Global Asset Management, which questioned 2,550 advisers across 15 countries.
In the wake of the global financial crisis, advisors have been swept up in a wave of reform as regulators across the globe work to ensure the financial service industry puts investors first.
Whether it’s the UK’s Retail Distribution Review (RDR), Canada’s CRM2, the European Union’s MiFID I and II, or similar acts in Australia, Germany, and Singapore, the goals are clear – to make adviser compensation more transparent and ensure the industry is acting in the best interest of investors.
Most recently, advisers in the US are coming to grips with new regulatory pressures presented by the US Department of Labor’s Conflict of Interest Rule, which is slated to go into effect in 2017.
More than eight in ten say heightened regulation and disclosure requirements are challenging to the growth of their business.
Ensuring they are in compliance with new regulations will likely require that advisers redirect time and resources to this critical business function.
More than three-quarters believe increased regulations could even lead to higher costs for clients.
Seven in ten say they will make at least some changes in their business model as a result of new regulations, and close to half (48%) say they will need to change their business model in order to sustain business growth.
Specifically, advisers anticipate a number of changes ahead: 38% say they will likely disengage with smaller clients, 29% plan to increase the use of passive strategies for lower balance clients, while 26% say they will change their fee structure.
Overall, these changes will require advisers to think differently about how they manage their practice.
Tags: Natixis
