Regulation 'can change client relationships'
Summary: Regulation 'can change client relationships'
Accountants and finance professionals are likely to see major changes in how they work with their clients as the regulatory landscape across the UK and Europe undergoes major changes, according to an industry expert.
Writing in Accountancy Age, private client director at RBC Wealth Management Julian Washington suggested the protean state of the rules governing the industry will lead to further shifts over the next few years.
"Legislative initiatives are affecting many aspects of the investment and financial landscape - from the process of selling financial instruments and products to the structure of financial institutions," he declared.
Following the crash of 2008 and the ongoing repercussions of that event, a great deal of scrutiny has been placed on the financial services sector, with the UK's banking industry forced to undergo major changes.
Mr Washington cited the results of the recent World Wealth Report from RBC Wealth Management and Capgemini as evidence for the shifting attitudes towards the industry - only 45 per cent of high net worth individuals trust financial markets, while just 40 per cent expressed faith in the current regulatory situation.
"The new regulatory environment has the potential to effect significant positive change in the form of greater transparency, accountability of services, improved financial reporting practices and greater alignment of business services," he added.
However, the client-investor relationship could be set to alter in a negative way, with concerns that the additional costs associated with compliance could cause problems within the sector.
The struggle to adhere to tight deadlines with regards to the glut of regulatory reforms could also slow down the pace of business, warned the RBC Wealth Management expert.
He concluded that this offers advisers a chance to create a new relationship with their clients, improving communication strategies and ensuring that transparency is central to all interactions.
While this shift could be time-consuming and expensive initially it will lead to better performance within the wealth management sector, claimed Mr Washington.