The cumulative impact of regulatory change is diverting time and resources away from other priorities, according to a new survey of members of wealth management trade association PIMFA.

Nearly all, 96%, agreed that regulatory red-tape is hitting their business with almost a third, 29%, stating that it is happening to a “large extent.”

Firms want clearer and more consistent regulatory communication, according to the inaugural PIMFA Regulatory Insights Tracker.

A majority, 54%, of firms pointed to the need for clearer communication to be the regulatory priorities on top of the agenda for the next 12 months.

Just under half, 48%, called for simplified reporting and reduced duplication of returns to be the priority.

Compliance costs were also regarded as important with almost eight in ten, 79%, firms reporting an increase in compliance expenditure over the past 12 months.

A majority, 54%, said they now feel clearer about what is required to remain compliant compared with this time last year, but nearly half, 46%, said they still do not feel clearer about how to best remain compliant with regulatory requirements overall.

David Ostojitsch, director of government relations and policy at PIMFA, said: “The findings indicate that while our members are committed to delivering the best possible outcomes for clients, the cumulative impact of regulatory change is making it harder for firms to do so, while juggling other priorities.

“There has been real progress in some areas but there remains more to do. In line with its desire to be a smarter regulator, we need to see a regulatory framework that is simpler, more proportionate and more consistent for firms to thrive and continue supporting long-term growth in the UK economy.”

• The findings were drawn from PIMFA’s inaugural Regulatory Insights Tracker. Data was collected in September from 52 member firms, including wealth managers, financial advisers and financial planners. Responses were anonymised and aggregated to provide a snapshot of industry-wide perspectives on current regulatory challenges.