The trade body’s second survey of member firms found that 63% do not plan to offer targeted support services, with only a small number expecting to do so from April. On simplified advice, 45% said they are not currently planning to offer it, while 36% said they are waiting for further details on how the regime will work before deciding.
The findings suggest firms are taking a cautious approach to both reforms, despite wider recognition that they could help improve consumer outcomes.
Four in ten firms said targeted support could play a significant role in helping retail investors make better financial decisions. Just 4% disagreed, while 57% said they had no strong view. Meanwhile, 31% said the regime could help put savers and investors on a pathway towards holistic financial advice, compared with 18% who disagreed.
The survey also pointed to signs that regulatory pressure may be starting to ease.
PIMFA said 78% of firms reported that regulatory change was diverting time and resources away from other priorities to a moderate or large extent, down from 85% six months earlier. The proportion of firms reporting higher compliance spending over the past year also fell from 79% to 65%.
There was also a marked drop in the number of firms reporting a significant increase in compliance costs, down from 31% six months ago to 13%.
Consumer Duty remained the area taking the most time and attention, cited by 66% of firms, although this was down from 85% in the previous survey. Customer vulnerability also fell as a major concern, from 52% to 34%, while operational resilience and cyber security rose from 13% to 25%.
Despite that, firms remain uncertain about the wider compliance picture. More than half, 56%, said they do not feel clearer about how to remain compliant than they did a year ago, up from 46% previously.
Firms also said regulators should simplify reporting and reduce duplication in regulatory returns, cited by 52%, while 39% said more realistic timelines for new rules should be a priority.
David Ostojitsch, director of government relations and policy at PIMFA, said:
“Our latest Regulatory Insights Tracker reveals signs of movement in the right direction on the overall regulatory burden on firms. It is particularly pleasing to see that, for many, regulatory change is beginning to consume fewer resources, which recognises the work of the regulator and other bodies in reducing this burden.
“It is also pleasing to see the findings regarding customer vulnerability, where PIMFA and its members have made significant progress over the last 18 months in sharing best practices and practical examples to support clients and the sector. That said, the overall survey findings still show that more can be done to support firms as they navigate regulatory change and drive UK growth.
“The findings on targeted support reflect our engagement with firms and the regulator, and, while uptake may be limited in our sector, there is clear support for measures that help close the advice gap and improve consumer outcomes. Simplified advice is therefore likely to be more relevant for many firms alongside holistic advice, as the results show. With proposals now published, focus will turn to building understanding with firms and the Regulator to assess how effectively they can support client outcomes and enable firms to grow.”
