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Life after MiFID II and GDPR – new research reveals the future of compliance


Wealth tech firm, JHC Systems (JHC) has published its latest research report ‘Compliance and Regulation in UK Wealth Management: Perspectives, Budgets, Views and Intentions’, in association with wealth management benchmarking firm Compeer Ltd.

The analysis provides an understanding of how the compliance function is evolving in terms of spending, headcount and technology, and what constant regulatory change means for UK wealth managers and their clients.
The report evaluates what firms have learnt from their MiFID II and GDPR strategies and how they are using that knowledge and experience to prepare for the future.
According to the report, firms are gearing up for an increase in people being employed, processes being updated and businesses making better use of technology – 80 per cent expect the amount of change in 2019 to be high or very high compared to 2018
Every new rule and regulation can ultimately be turned to commercial advantage, with 93 per cent of respondents saying that compliance could be used strategically.
In addition, because many regulatory changes affect the entire enterprise, 50 per cent of the firms questioned said the costs of compliance are seen as a core business cost rather than a department-specific expense.
Some 50 per cent of interviewees, meanwhile, intend to spend more on risk management in 2018 than they did in 2017, with the Senior Managers and Certification Regime high on the agenda.
Andrew Watson, head of regulatory change at JHC, says: “A key takeaway is that compliance, in common with portfolio management, account administration and client service, is now part of the fabric of the wealth management business and plays an essential role in in the firm’s growth and business development strategies. Taking a positive approach to regulation ensures that firms stop wasting time and other resources on ‘firefighting’ tasks. Instead, firms can use each new rule and directive to their strategic advantage and have the confidence of knowing that their regulatory status is unimpeachable.”
The report’s results are from interviews with heads of compliance and c-suite roles at private banks, private client investment managers and full-service investment managers responsible for managing GBP350bn of private client assets – almost 40 per cent of the industry’s total assets under management in the UK.

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