Regulation, such as the consumer duty, is taking a toll on advisers' mental health and wellbeing, according to Morven Grierson, compliance director at MKC Wealth.
Speaking to FTAdviser, Grierson discussed how smaller firms are bearing the brunt of regulatory pressures which in turn is affecting employees' mental wellbeing.
She said: “If you are a small firm, not only are you running the business, you have the commercial success of it resting on your shoulders, you have clients and employees to think about and then on top of that you need to try to understand and implement big chunks of regulatory change.
“This can start to take its toll on advisers who don’t want to get it wrong for their clients.”
Grierson pointed out that consumer duty was the “final nail in the coffin” for firms that were thinking of selling due to the pressure it placed on businesses and their employees.
She said: “In the past year especially we have seen a sense of urgency from advisers looking to sell their business because consumer duty was the final straw for them.
“Although the new piece of regulation is a good thing, it can cause advisers to become worried and anxious from not knowing what to do with it, coupled with the added concern that the regulator might pay them a visit and take a deep dive into what they’re doing. Even for me that's stressful and it's my job.”
Grierson said the burden consumer duty places on advisers' wellbeing comes from the ‘prove it’ aspect of the regulation.
“We must prove we have taken all reasonable steps to deliver value to clients and that our work has helped them to pursue their goals.
"This requires so much more than simply advising on a financial product and selecting funds - the financial advice of old - but real investment in technology and people and a change of mindset."
Operational vulnerability
From a regulatory perspective, Grierson suggested the regulator needs to recognise employee vulnerability.
“I always put employee wellbeing in my reporting because ultimately if the employee is not able to do their job this impacts the service we offer clients and what they get from us," she said.
“The regulator has done lots of work in respect of vulnerability for clients and the resilience of operations but not so much operational vulnerability.”
Grierson also wanted to see more focus and support given to human resource and people management as it is a fundamental part of what the advice sector does.
She added: “The FCA is a consumer regulator, it is there to protect the client but you would hope that would follow through into client outcomes by helping the people who serve those clients.”
Support from employers
Grierson highlighted the importance of diversity in how employers and employees treat and care for each other.
She said: “It is always important to help people on an individual level and understand that everyone’s needs and worries are different.
