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  • …Or is it more like wading through treacle? Perhaps a Forth Bridge job might be more appropriate? What about a never-ending dash to keep all the plates spinning? Maybe it compares to juggling with a tonne of loose soot? (now that can be tricky). Any and all of those similes would seem apt when it comes to summarising the process of meeting and managing the demands of regulatory compliance. Of those comparisons, it’s ‘wallpapering’ that nails it for me. Why? Because no sooner is a bubble ironed out, than another pops up.

    A choice of one is no choice at all

    The principal reason why financial institutions find regulation so unsettling, is they can never be certain that all the ‘bubbles’ have been dealt with. Every new rule and directive poses different challenges. As such, precedents (to learn from) are few and far between. Given that regulation is an evolving, vast and amorphous mass, and assuming the majority of small to medium-size wealth managers would rather not take sole responsibility for interpreting it, what options do firms have? Usually, it’s just the one—a consultancy. Now as sound as their advice undoubtedly is, consultancies are no longer the only source of informed guidance available to wealth managers.

    Reactive is good, proactive is even better

    Financial institutions sometimes forget that their service provider is as much in the firing line as they are in terms of dealing with compliance. When we (JHC) are required to Incorporate new and amended regulations in our multi-office operating platforms and tools, it involves many people and a great deal of work. But could vendors do more than update their products as and when new regulations emerge? In our view, yes they could…and we do.

    Contributing at the start and implementing at the end

    Service providers should be prepared and equipped to engage themselves in the early stages of regulatory change and not just at the ‘tail end’ of matters. As and when guidance emerges, we bring together those that are directly affected by the new rules and regs—our clients, to analyse the details, establish a consensus and assess the likely impact on operations. In other words, JHC’s clients don’t have to go it alone. Nor are they totally dependent on consultancies to interpret or evaluate the ramifications of regulation. Whenever a client needs advice, we’re on hand to give it.

    Puzzled by my preferred choice of simile? Ask your parents: they’ll tell you all about the joys of hanging wallpaper…

    Andrew Watson - Head of Regulatory Change - JHC

    *This blog is extracted from our most recent UK wealth manager survey published in May 2018 in association with Compeer Ltd: Compliance and Regulation in UK Wealth Management