View the article online at http://citywire.co.uk/wealth-manager/article/a754447
Suitability pressure could see 100 wealth managers 'shown the door'
by Elsa Buchanan on Jun 10, 2014 at 11:48
Up to 100 wealth managers industry-wide could be shown the door over the next year as they struggle to get to grips with suitability and post-RDR professional requirements.
Increasing pressure from the Financial Conduct Authority (FCA) and hefty fines handed out on the back of the suitability review, which was introduced in 2010, have already driven some firms to release some ‘resistant’ senior staff.
But Vertem Asset Management co-founder Gary Stockdale believes the haemorrhage of staff has only just started.
‘Over the next year or so, a hundred will leave. They will either be shown the door, or leave through a more natural process, and join smaller firms, especially boutiques,’ he said.
His view is shared by Gilly Green, wealth management practice leader at Knadel, who said an increasing number of firms are asking her how to motivate people showing resistance.
‘It’s round two of the suitability review and there have been a lot more fines, so firms are taking it a lot more seriously. What firms are saying is “get with it or get out”,’ she said.
The chief executive of one wealth management company, who preferred to remain anonymous, described those in the industry who remain resistant to suitability measures as ‘the dying embers of the old style of private client management’.
The CEO said the removal of this ‘final wave of resistance’ would ultimately prove to be a positive. ‘It will be good for the industry and clients. We need a modern financial services sector. With the pension reforms and the opportunities they present to wealth managers, the industry has got to be as slick and modern as possible.
‘With the client’s best interests at heart, there is no room for resistant behaviour. The good news is there are a limited number of firms where you can go and be a lone agent.’
The CEO also believes this will be beneficial for younger investment managers coming through.
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