Three quarters of advisers said the impact of regulatory and compliance costs were their primary concern, up from 72% in 2015 and 67% in 2014.
It marks the fifth consecutive year that these costs have topped the survey’s list of major concerns facing the financial advice profession.
Tangible change needed
PFS chief executive Keith Richards said: “Despite the efforts of regulators and government, through the introduction of the Financial Advice Market Review (FAMR), to assure the sector that it will tackle regulatory barriers and costs in order to help increase access to advice, it is clear there is more to be done through the introduction of tangible change.
“The barriers created by inefficient and burdensome regulation continue to strangle the personal finance sector, thereby restricting consumer access to the financial advice marketplace, leaving millions unprotected and left to fend for themselves.
“As the FCA and government continue to consult on key proposals resulting from last year’s FAMR, I’d urge them to act on the feedback and pragmatic solutions offered by the sector on how best to address the barriers, and introduce meaningful change which will in turn assist millions of consumers in their long-term life planning,” he said.
Other challenges
The second most cited concern was Brexit and a general economic slowdown, as identified by 34% of PFS members.
A similar number of respondents identified execution only and online simplified advice as a major threat to their business. This appears to be a growing concern, with 33% of respondents citing it as a concern in the latest survey, up from 22% in 2015.
Complications from implementing EU regulations (29%) and a lack of new talent/available skilled trainees (22%) were also identified as major threats in the short term.
Opportunity knocks
The government’s pension reforms were considered the biggest opportunity for advice firms in the next three years, followed by referrals from professional connections and higher professional standards.
While the ranking of the three biggest opportunities remained unchanged from 2015, advisers were much more downbeat about the short-term prospects for economic growth.
Just one in five advisers identified economic growth as an opportunity for their business in the next three years, down from two in five in 2015.
