Fears of further compliance demands and regulation in the wake of the Consumer Duty are keeping advisers up at night, according to research from the lang cat.
Its sixth annual State of the Advice Nation report found that compliance and regulation kept a third (31%) of advice business owners awake at night, with many expressing concerns about the pace and volume being difficult to contend with.
Fear of failing to meet client expectations was shown to be causing sleepless nights for one in 10 advisers, while others said a lack of acceptance from clients about lower returns and delivering tough messages about the impact on retirement plans were of concern to them.
Time constraints were also shown to be causing issues, with 9% of advisers citing workload and having too few hours in the day to get everything done as a source of stress. Close behind was the rising cost of doing business for 8% of firms, linked to regulatory fees, increase in tech budgets and the consequent hit on profit margins.
However, advisers are increasingly turning to tech, with a third of the advice industry either currently using AI or intending to do so within the next year and 58% planning to do so within five years.
Despite the many challenges faced by advisers, a third of firm owners are predicting growth going forward.
Steven Nelson, insight director and co-author of the report, said: “The burden of regulation continues to be a massive headache for firms and it’s a real concern to see this driving some to breaking point. Many respondents from smaller firms talked about the disproportionate impact on them.
“On the flip side, it’s reassuring to see so many embrace the potential of tech and AI, particularly if they see it as freeing them up to focus on other priorities. Frustrations remain with other tech and the ongoing issue of integration, but we’ll share more on this later in the year.”
