US managers grapple with regulation
Asset managers in the US are facing the same challenges as their counterparts in Australia in terms of coping with existing and proposed regulation, according to new research released by Boston-based Cerulli Associates.
According to the US-based research group, US asset managers are being burdened by rising compliance costs that are impacting their profitability as they spend more time, resources and money in meeting their compliance obligations.
The research deals with the manner in which US regulatory bodies, particularly the Securities and Exchange Commission, have been stepping up their efforts to ensure that all investors are treated equally by their financial services providers.
“In the wake of recent corporate fraud, a heightened threat of terrorism, and the market-timing scandals within the mutual fund industry, the list of relevant financial services-related regulatory organisations is growing,” Cerulli said.
In addition, it claimed that over the past several years a number of key pieces of legislation have been implemented that are dramatically affecting asset management firms — Sarbanes-Oxley, the US Patriotic Act and anti-money laundering legislation.
Cerrulli said these laws, combined with the Compliance Programs of Investment Companies and Investment Advisor Act have placed substantial pressure on asset managers.
The research suggests that asset managers have moved to deal with the challenges through stronger compliance departments and by beefing up their staffing in key areas.
AUTHOR
Mike Taylor
Recommended for you
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
Australian licensees are expected to make greater use of custom model portfolios for their clients, according to State Street Investment Management, following in the footsteps of US peers.
Adviser Ratings has argued that it’s time for more advisers to utilise digital engagement tools available to them as a disconnect grows between consumers seeking advice from finfluencers and from professionals.
