Comprehending the intricate requirements of personal compliance within the financial advice sector can be a daunting prospect. To gain insight into the current state of affairs in this area, IFA Magazine conducted a readership survey in partnership with the specialist T&C and People Compliance platform HRComply. This two-part series will analyze the key findings from this survey, shedding light on how advisers and advice firms tackle these compliance issues.
The survey revealed that most of the respondents declared a high standing with regards to financial advice compliance, with 84% estimating their current level as either ‘Good’ or ‘Excellent’. Despite this self-assessed positivity, there were still concerning discrepancies in knowledge regarding regulatory updates, merely 12% of all respondents stated they were not at all aware, whilst a further 18% admitted to only having a ‘general’ knowledge. This is particularly concerning given this is a constantly changing landscape with ever-evolving regulations.
Analysis of the survey data also gave an insight into what roles are being taken on within firms to manage the compliance processes. Broadly speaking, 44% of the respondents revealed they had employed an in-house compliance officer, with a further 9% having an outsourced compliance manager. These figures suggest that a majority of advice firms are taking the initiative in regards to implementing a clear and comprehensive compliance strategy.
The survey pointed to some key areas that many firms were still failing to address in their plans; most notably the lack of data protection and consumer credit policies. Data protection is of particular importance, not least due to the introduction of GDPR, yet the survey revealed that a worrying 28% of respondents admitted they had no policy in place, pushing their intention to adhere to the rules into question.
A significantly lower figure of 10% stated they had no consumer credit policy in place, however, this did represent a relatively large number and could cast an eye of caution over the industry. Furthermore, this data highlights the need for effective enforcement of the regulations set in place, as well as the need for advisers to open their eyes to the specific rules and regulations each sector falls under.
Overall, the survey results suggest that most of the advice industry is in a positive state in regards to their compliance strategy and implementation, although there is still work to be done in order to ensure that firms can stay up to date with the evolving regulatory landscape. Finally, it is essential for advice firms to take responsibility for the various policies and regulations in place, undertaking regular checks to ensure that the firm is meeting its obligations and fully protecting its clients.