With the 3 January deadline for the implementation of the European regulation looming, Smith, senior vice president of business development at the firm, said there was still a lot of work to be done by both product manufacturers and firms on the distribution side to get up to speed.
The new rules will require much closer communication between firms on all sides as the regulator cracks down on mis-sold products and opaque costs and charges for funds.
Preparing for the new regulation involves harnessing a back catalogue of data and getting used to new processes such as reporting back on sales and suitability.
It is reporting back this sales data that is proving to be a “huge headache for the wealth managers and fund firms” as “they have never had to do it before,” Smith said.
He added timescales for preparing for January have been incredibly tight, while firms have cried out for more clarity from the regulator.
“The regulators are people that have clearly not worked in the industry. If they were they would write the regulation very differently, putting it into plain speech,” Smith said.
He added: “Time pressure is one of the biggest concerns and it’s absolutely a valid concern as it’s very, very tight timelines they’re working to.
“Regulators are not expecting all the data to be in place on day one. Even the regulator has realised that.
“The rules are all extremely well intentioned, they are all about protecting investors. It’s the fact that they do not interlink, so people have built three programmes rather than one programme. They don’t realise the work they have done on Solvency and Priips is relevant for Mifid, too.”
Smith recommended firms look at what they had already built to deal with past regulatory hurdles, as most ask for the similar data collection.
Trying to conform to the same standards as other firms would also help in the painful process, Smith added.
