A new report has outlined what government reforms are required to unlock the private banking and wealth management (PBWM) sector’s “full potential”.
The report was released by the Personal Investment Management & Financial Advice Association (PIMFA), UK Finance and KPMG UK today (20 May).
The ‘UK Private Banking and Wealth Management: Harnessing the Sector to Deliver Economic Growth’ report outlines four key pillars of reform needed.
These are based on interviews with chief executives and senior leaders from across the PBWM and the financial advice sectors.
The four areas for reform have been identified as:
Fairer and more proportionate regulation
The report stated that policymaking and supervision should be more predictable, consistent, and supportive of the industry.
Additionally, there should be closer collaboration between the Financial Conduct Authority (FCA), Financial Ombudsman Service (FOS) and Financial Services Compensation Scheme (FSCS).
Embracing innovation and smarter compliance
The sector is increasingly focused on how emerging technologies like AI can enhance client outcomes and the government can play a key role by supporting incentives that boost investment and broaden retail participation in financial markets.
A clearer, more stable tax environment
There is an opportunity to build greater confidence by providing more certain and predictable tax policies and clearer direction.
Strengthening financial literacy
A persistent and critical gap in financial literacy remains a key concern for industry leaders.
Improving financial literacy can unlock greater engagement with advice and better decision-making.
UK Finance managing director of personal finance, Eric Leenders, said: “This report provides a clear roadmap for how the wealth management and private banking sector can partner with government to drive growth.
“It also makes clear that if we want more people to benefit from financial advice and long-term investing, we need to remove barriers, modernise regulation and really invest in improving financial literacy.”
Lord McNicol of West Kilbride, Iain McNicol, added: “The private banking and wealth management sector is a major contributor to UK economic growth.
“It boosts productivity and prosperity, and as such has a vital role to play in advancing the government’s growth agenda.
“So I’m delighted to see this report put forward a constructive set of proposals for how the sector can contribute further, and to commit to working closely with the government to make this growth a reality.”
The findings of the report suggest a sector that is ready to partner with government, regulators and the public to build a more “inclusive, resilient and prosperous financial future”.
In March, Maria Fritzsche senior policy adviser at PIMFA wrote an article for Money Marketing about the importance of operational resilience in financial services.
