Lightening the not-so-soft touch of the regulator

Added 27th January 2016

The regulatory pressures keeping wealth managers away from their core day job – running money – are unlikely to abate anytime soon, which is where companies like Pershing come in.

Lightening the not-so-soft touch of the regulator

Regulatory and legislative change, the rise of robo-advice, consolidation among intermediaries and an ever-changing client base – it is no wonder that solutions providers such as Pershing are looking to a bright future. Part of BNY Mellon, New Jersey-based Pershing describes its offering as execution, settlement and a custody business.

For adviser clients, it also provides what it describes as practice management support, aimed at “enhancing their business and client experience”. “We sit in the value chain as the back and middle office for these firms,” says chief executive officer Mark Tibergien. “One of our key strengths is our particular focus on regulatory and client money responsibility. We do not offer financial planning or discretionary investment management – we do not compete with our clients. We focus on what we are good at – the trading, custody and regulation, freeing up clients to focus on serving their clients and growing their businesses.”

Heavy hand of regulation

Regulation in particular sits at the forefront of wealth managers’ agenda today, with the latter part of 2015 proving to be a particularly busy one for the FCA. In November, the regulator unveiled details of its study into asset manager competition, focusing on how firms deliver value, whether they are motivated and able to control cost and the impact of investment consultants.

Then, in December, its latest thematic review found around six in 10 clients of wealth managers and private banks are receiving unsuitable advice. This scathing report came just weeks after FCA chairman John Griffith-Jones spoke of a “less is more” approach to wealth manager regulation, recognising the legislation from both the UK and Europe is creating issues for compliance, management and systems in equal measure.

For Tibergien, financial professionals today must pay particular attention to transparency, objective advice, reasonable price and promoting a culture of ethical behaviour, regardless of regulatory requirements. Among the big issues, he believes, is the safety of client money and assets, which advisers can manage themselves or outsource to companies such as Pershing.

Another is preparing for Mifid II, with the second incarnation of these rules to apply from January 2017. As discussed previously in Portfolio Adviser (November 2015, p62), wealth managers will need to look closely at transaction reporting, cost disclosure arrangements and how they report to clients.

Inside the Portfolio Adviser - January 2016 Issue

Portfolio Adviser - January 2016

The January issue of Portfolio Adviser magazine is now available to read online. View your digital edition by clicking on the link below, or download the free Portfolio Adviser App through your app store. 


Inside this month's edition:

  • The real differences between dogmatic and pragmatic fund manager philosophies
  • Putting forward a case for value investing after a stellar few years for growth stocks
  • How to navigate the brave new world of alternatives

Portfolio Adviser is available in the iTunes App StoreGoogle Play and on Kindle Fire. To see how you can access your digital magazine click here

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About Author

Gary Shepherd


Portfolio Adviser

Gary joined Last Word Media in 2009, becoming editor of Portfolio Adviser a year later. Previously, he worked at Incisive Media with roles across its Professional Adviser, Investment Week, Bloomberg Money and Mortgage Solutions titles. Gary has been shortlisted for various awards, winning Headline Money Investment Writer of the Year in 2010.



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