Don’t sacrifice clients to win the compliance war

I was interested to read a Professional Adviser article where one adviser firm is considering releasing 500 clients because MiFID II regulations are making it unprofitable for them to service them.

Are things really so bad that anyone would consider cutting ties with such a high number of people who should be the very lifeblood of a firm in the financial advice business?

I realise that regulation is one of the biggest challenges for adviser firms today and it’s easy to see why reducing workload by cutting clients might seem like a good battle plan. Had the regulations and legislation that are in force today been in place 20, or even 10, years ago, then retreating would have perhaps seemed the obvious answer. But that is no longer the case.

Today advisers have a raft of third-party specialist solutions at their disposal that, when utilised properly, can remove many of the time constraining hurdles of the past and allow for more, not less, clients to be serviced and in a more profitable way.

Solutions offered by PortfolioMetrix, for example, can help them tackle the day-to-day battles surrounding investment management, suitability and client communication, and when put together with some of the digitised back, middle and front office management software that’s readily available, it’s possible to win the compliance war and keep and gain happy and satisfied clients whatever their asset status.

Yes, it does take a bit of time to research the solutions and implement them but there’s plenty of help out there and the rewards far outweigh the effort.

The brutal fact is, whether you’re building a business for the future, or looking to exit the industry sooner rather than later, harnessing technical and specialist solutions is the only real option.

For firms looking to grow and prosper, they need to operate in a lean and efficient manner that delivers value for all stakeholders. For those looking to exit, they should only expect the best price if they can demonstrate their firm is configured to service clients of all types, regardless of wealth.