The majority of wealth management organizations consider new government regulations to be a top industry challenge, according to a new poll released today by SEI. Respondents specifically cited concerns about the Dodd-Frank Act, including the Volcker Rule and uniform fiduciary standard initiatives, among other things.
Fifty-eight percent of the 100 participants at SEI's annual Connections Conference said that regulatory changes pose their single largest challenge. However, only 44% of respondents ranked managing regulatory changes as their firms' top priority, demonstrating that other issues are splintering their focus.
SEI's poll also indicated that advisors are still seeking clarity about the details of new regulation. Only 22% feel comfortable they have received enough information to fully understand the new laws, while the remaining three-fourths are either "learning about them" (61%) or are still "in the dark" (19%). However, 94% of respondents said they feel "somewhat confident" their firm will meet the new regulations by the time they take effect.
"We've entered a new era in the wealth management industry, where meeting regulatory requirements is a constant challenge for wealth management firms," said Sandy Ewing, the senior vice president of SEI's Global Wealth Services. "The challenge for firms is anticipating the regulations' parameters before they're finalized and bracing for unexpected changes, without losing momentum in other areas of their businesses."
Some wealth managers indicated that using new technology ranked high with their firms, with 24% of respondents listing it as their firms' top priority. That technology, however, comes with its own concerns; 97% of respondents worried about security threats that could result as they tried to beef up their systems.
"The desire to improve technology is a trend we've been witnessing for some time now," Ewing said. "Wealth management providers are searching for ways to automate processes and more easily aggregate data from a variety of sources to enhance their client reports. In the end, technology enhancements will allow firms to achieve greater consistency and eliminate inefficiencies, giving them more time to focus on their clients."
Hosted at SEI's Oaks, Pa., campus from June 11 to 13, the conference included banking, wealth management, operations and technology personnel that support wealth management organizations across the United States.
SEI offers investment processing, fund processing and investment management business outsourcing solutions for corporations, financial institutions, financial advisors and ultra-high-net-worth families.
--Jim McConville