Compliance shortage in UK asset management

Canary-Wharf3A third of major UK asset management firms do not have sufficient internal resource to manage their firm’s regulatory risk, a survey of 20 heads of compliance shows. PWC, a business consultancy, found that despite the majority (80%) of heads of compliance working at least 11-12 hours a day, a quarter of firms feel they are not effectively managing their regulatory risk. This is despite nearly every firm ranking regulatory risk in the top five that they face. This under-supply of compliance professionals is mirrored in the external market, meaning unless action is taken the asset management industry could be left facing a compliance skill shortage which will continue for at least the next two to three years. Amanda Rowland, partner and head of asset management regulation, PwC, says: “Asset managers simply do not have enough sufficiently experienced staff to cope with the increased regulatory burden. This is leaving many firms concerned that they are not effectively managing risk despite senior compliance staff working longer and longer hours.”  The compliance function is the gate keeper in controlling regulatory risk and firms need to ensure they do not over-stretch their existing compliance teams, Rowland adds. “There is still a long way to go until we reach a perfect world here. Firms should look at their internal compliance business model, determine what their core compliance activities are, and focus their resources on these areas. For the remainder of activities they should consider alternative solutions including outsourcing or ring-fencing in another part of the business.” ©2013 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.