Financial services survey 2013 - Smith & Williamson

smith.williamson.co.uk

Financial services survey 2013 - Smith & Williamson

Financial services

survey 2013

An upward trajectory


Contents

Executive summary 3

Colin Aylott

Economic outlook 4

Personal view: Chris Kenny

Tax6

Personal view: Tim Lyford

Regulatory developments 9

Personal view: Lindsay Manson

The UK regulators 11

Personal view: Guy Swarbreck

Business turnover 14

Business headcount 15

Staff remuneration 16

Business structure 17

Future development 18

Methodology19

About the financial

services and markets group 20

About us 22

Key contacts 23

2 accountancy • assurance & business services • corporate finance


Executive summary

Colin Aylott

t: 020 7131 8158

e: colin.aylott@smith.williamson.co.uk

While the economy does undoubtedly remain a concern, the

financial sector appears to have bucked the general economic

trend and produced consistent growth over the last three

years. Our survey echoes this positive message; the majority of

respondents report increased turnover over the last 12 months,

and predict that this trend will continue over the next year.

In order to ensure that this upward trajectory does stay on the

right path and that it benefits the wider economy, companies

need to keep expanding and recruiting. Most respondents

reported little or no change to their headcount over the last

year, although a significant amount expect to start increasing

their employee numbers throughout 2013. This is perhaps

indicative of businesses preferring to wait until they see a

period of sustained growth before they commit to expansion,

and it may well be that they decide that now is the right time

for recruitment.

Simplifying and relaxing overly complex and demanding tax

rules and reducing employment costs, are widely regarded as

some of the best incentives for companies to keep recruiting,

which should be the Government’s ultimate aim. Businesses

would clearly be more willing to employ increased numbers

of staff if something was done to cut the cost of employment.

Entrepreneurs’ relief is one particular tax scheme that could

benefit from simplification, and entrepreneurial activity is surely

something that should be encouraged by the Government.

Regulatory matters are particularly significant this year due to

the high number of new and re-evaluated regulations coming

into play. This makes it particularly impressive that the sector is

still able to thrive despite this constant shifting and tweaking of

regulations and tax rules.

Of particular frustration for businesses in this sector are regular

delays to regulatory implementation dates. Businesses spend

time and money trying to meet deadlines that are frequently

changing or being postponed indefinitely, making it extremely

difficult to plan for the future. This uncertainty is a serious

hindrance to both growth and investment.

It is important for businesses to make sure they stay on top

of the latest regulations and processes to ensure that they

are robust enough to defend themselves if they are ever

challenged. Equally, authorities need to properly consider

tax and regulations before implementing new policies and

changes, in order to ensure that they will not produce any

unwelcome and unintended consequences. Interviewees are

generally positive about the Financial Services Authority’s split

into two bodies, although there is concern over the possibility

of additional red tape, paperwork, or overlapping regulations

causing confusion.

Our survey also found that the financial sector is largely not

embracing social media. LinkedIn is by far the most popular

choice, but in general the sector does not see that social media

will bring benefit to its business. The financial sector is still a

traditional world, with an audience that expects to receive

information via more traditional media. In addition, regulatory

matters will have an impact on what businesses are allowed

to publish.

Overall, our survey carries a positive message despite

continuing problems in the UK and European economies.

However, we call on the Government and regulators to help

businesses to expand and new businesses to form, possibly

with better focused regulations and simpler tax rules, as the

employment that this creates will only make the economy

grow ever healthier.

investment • forensic services • tax

3

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