AM compliance budgets hit peak
Changing business models, regulatory scrutiny and cost
cutting are impacting the hiring habits of asset management firms, according to
PwC’s 2016 survey of global chief compliance officers (CCOs).
Asset managers are further centralising their global
compliance functions in order to bring consistency and efficiency on the back
of increasing pressure from both local and global regulators.
66% of survey respondents said staff retention is a problem
and will continue to drive up the cost of hiring compliance staff.
The sector has seen increasing compliance budgets since the
financial crisis but half of the CCOs interviewed said their budget has reached
a peak, reflecting cost pressures in the industry.
Such stalling in budget means that compliance functions are re-evaluating the skillset they need, as regulators deal with MiFID II and contingency planning for Brexit.
As a
result, one third of the CCOs surveyed by PwC say they are hiring compliance
staff from the sell-side, who they feel are better able to challenge and oversee
the necessary changes in the business.
“We continue to see global compliance functions evolve in
response to ever increasing regulatory demands,” said Amanda Rowland, asset
management regulation partner at PwC.
“These demands, coupled with the current cost
pressure in the sector mean we are likely to see ever greater focus on
strategic and innovative change to the way global compliance functions operate
in the future.”
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