Nearly half of the advisers in Hong Kong say regulatory changes will be the greatest challenge to their business this year, according to research from Skandia International.
The offshore business of Old Mutual Wealth, which polled advisers in Hong Kong and Singapore, says advisers in Hong Kong “are feeling uncertain”.
New requirements on the sale of investment-linked assurance schemes products, including rules around commission disclosure, recently came into effect in Hong Kong.
Skandia International says 38.1% of the advisers it polled were not sure how the regulatory changes would impact their business.
Only 28.6% say it will have a positive impact and 33.3% say it will have a negative impact.
However, nearly half of financial advisers say regulation will have a positive impact on customer outcomes (47.6%); less than a quarter (23.8%) say it will not have a positive impact, and nearly a third say they are “not sure” (28.6%).
Their Singapore peers are more certain about the impact their regulatory changes, including the Financial Advisory Industry Review. In Singapore, half of the advisers say the regulatory changes will have a positive impact on their business, with 44% saying it will have a negative impact. Just 6% of advisers are unsure.
As with Hong Kong, Singapore advisers feel the impact on customers would be more positive, with 61.1% believing it will have a positive impact on customer outcomes; 22.2% disagreed with just 16.7% not sure.
“The adviser survey took place just before the first wave of recent regulatory changes came into effect in Hong Kong,” Skandia International says. “The uncertainty amongst advisers could stem from the fact that the changes were introduced at relatively short notice coupled with limited direct guidance to advisers on implementing the changes, such as how to respond to disclosure questions. “
It warns that without guidelines there could be differences in the way advisers are interpreting the changes, which could lead to a number of inconsistencies.
The results based on the opinions of 60 advisers in Hong Kong and Singapore.
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