The evolving regulatory landscape and increasing compliance costs will continue to be a major challenge for the asset management industry, according to a new report from Alpha FMC.
The report, which is based on qualitative and quantitative polling of major asset management houses representing a combined GBP6 trillion AUM, found that whilst most asset managers consider that they are well set up to manage the regulatory agenda, it is proving increasingly costly, with 78 per cent of respondents expecting to spend more in budgetary terms on regulation in 2015 than they did last year, rising to 89 per cent in terms of time devoted to the issue.
Duncan Spencer (pictured), Director, Alpha FMC, says: “One of the things that we found most interesting during our research was that, for asset managers, MiFID II is squarely positioned as the regulatory directive of primary concern for managers over the coming years. More generally, apart from the high implementation costs of ongoing regulatory compliance, most of the asset managers we’ve spoken to have bemoaned the lack of clear or consistent understanding of what each regulation is actually driving at. There is also scepticism as to the extent to which the regulatory agenda is being considered within the context of existing and future regulatory framework by policy makers.
“As regulators continue to assess the new rules, our study delivers two requests from the businesses they are regulating: clarify the true objectives of all regulation, and consider regulation in the round – rather than as a collection of initiatives to be regarded in individual siloes.”