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Beverly Chandler

WMA summit sees inaugural risk survey published


Over 400 delegates attended the Wealth Management Association’s 18th annual summit on Thursday, 12 November, themed, ‘2015 and beyond’ and marking the 25th year of the Association. 

A regulatory overview from the Chairman of the FCA, John Griffith-Jones saw him announce that this was a regulator with a new look on life. Griffith-Jones said: “Whilst we are going through a painful period as we bed in regulatory changes, it is not sustainable that boards spend a disproportionate amount of time on what the regulator wants rather then what the clients want.”
The Association took the opportunity of the event to publish its inaugural risk survey, designed to be an annual overview of the current and emerging business risks within the wealth management sector.
The main regulation causing concern cited by responding firms was MIFID II at 81 per cent. “Firms are extremely concerned about the failure of the European authorities to meet the original timetable” the survey found. “Firms do not yet have sufficient information in order for them to start preparing the details system specifications for system development which is needed to enable firms to meet their obligations under MIFID II and MiFIR.”
The second highest concern among respondents at 56 per cent was fraud and cybersecurity. “Firms appear to be very alert to cybersecurity and are seeking to mitigate the risk. It was felt that the FCA could assist firms in this area and give a lead on practical steps firms could take to mitigate the risk…Firms are unclear as to what the FCA’s expectations are, particularly in respect of proportionality having regard to the fact that the nature and extend of firms’ activities differ.”
The survey also found that 53 per cent of firms are looking at the impact of suitability and how they re-engineer their business models to accommodate these changes.
Looking forward, fewer respondents were focused on the business risks for 2016 and beyond. The WMA infers that respondents and their firms were more concerned about the immediate term rather than planning for the future and forecasting potential risks. Regulatory risk was highlighted as the top concern for 2016 at 56 per cent and beyond, followed by IT advances, systems developments and the impacts they will have on the business at 17 per cent and pensions freedoms at 13 per cent.

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