Some worry that, through being bound by regulations that don’t necessarily apply to HNWs, banks’ levels of client service might suffer
Some HNW advisers are concerned that the Financial Conduct Authority (FCA), which replaces the Financial Services Authority (FSA) next week, will distract financial institutions from delivering high quality services and products to wealthy clients.
The FCA, to be led by chief executive Martin Wheatley, has vowed to clean up the financial sector by banning potentially harmful products and using Twitter to closely monitor the activities of financial institutions.
While a noble aim in theory, some worry that, through being bound by regulations that don’t necessarily apply to HNWs and dragged into increasingly burdensome 'box-ticking exercises', banks’ levels of client service might suffer.
‘The administrative regulatory environment continues to get tougher,’ says Simon Rylatt, a partner at private client law firm Boodle Hatfield, ‘and for those who fall outside of the middle ground – ie HNWs – it could be quite restrictive. I know that a lot of investment managers are concerned about the effect it’s going to have.
‘Financial institutions will continue to be subject to regulation that might not be applicable to HNWs, so some are worried whether they’ll meet their goals with all these box-ticking exercises to complete.’
The Financial Conduct Authority, like the FSA, will be a results-driven organisation, and it will be interesting to see what difference – if any – it makes to our financial services sector. But HNWs will be hoping that the sophisticated levels of services to which they have become accustomed aren’t compromised by their bank’s preoccupation with bureaucratic hoop-jumping.