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58 per cent of wealth management firms cite regulatory changes as biggest challenge


In today’s environment of complex and frequently-modified regulatory updates, including Dodd Frank, the Volcker Rule, and the Uniform Fiduciary Standard initiatives, the majority of wealth management organisations view meeting these new regulations as a significant challenge, according to a poll by SEI.

The poll, completed by 100 participants at SEI’s annual Connections Conference, revealed that regulatory changes pose the single largest challenge for 58 per cent of survey respondents. However, only 44 per cent ranked managing these regulatory changes as their firms’ top priority, demonstrating that other issues are splintering their focus.

The poll also revealed that clarity is still needed surrounding the details of new regulatory changes. Only 22 per cent feel comfortable they have received enough information to fully understand the new regulations, with the remaining three-fourths either "learning about them now" (61 per cent) or reporting they’re still "in the dark" (19 per cent). However, nearly all respondents (94 per cent) feel at least "somewhat confident" their firm will meet the new regulations by the time they take effect.

"We’ve entered a new era in the wealth management industry, where meeting regulatory requirements is a constant challenge for wealth management firms," says Sandy Ewing, senior vice president of SEI’s Global Wealth Services. "The challenge for firms is anticipating the regulations’ parameters before they’re finalised and bracing for unexpected changes, without losing momentum in other areas of their businesses."

Regarding technology, nearly a quarter (24 per cent) reported that integrating new technology is their firms’ top priority. Technology does not, however, come without worries, as nearly all of those polled (97 per cent) have concerns with security threats resulting from enhancements to a firm’s technology.

"The desire to improve technology is a trend we’ve been witnessing for some time now," says Ewing. "Wealth management providers are searching for ways to automate processes and more easily aggregate data from a variety of sources to enhance their client reports. In the end, technology enhancements will allow firms to achieve greater consistency and eliminate inefficiencies, giving them more time to focus on their clients."


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