The survey, which polled 10 firms with combined assets under management worth £6tn at the end of Q1, showed that 78% of those questioned anticipated spending a higher proportion of their budgets on regulatory adherence than in 2014.
When asked how much a rise they are expecting, respondents forecasted a spending increase of between 21% and 30%, despite half of firms having created departments specifically for complying with regulations.
Furthermore, while 70% of managers saying they are well-prepared for handling the agenda, 89% predict that they will have to devote more time to regulatory adherence.
The findings come in addition to the 63% of managers that spent more on Alternative Investment Fund Managers Directive compliance in 2014 than initially budgeted for, with the Markets in Financial Instruments Directive II, European Market Infrastructure Regulation and Solvency II directives causing the most concern going forward.
The study also indicated investor scepticism over the clarity of the directives, with EMIR and MiFID II cited as having overlaps in their agendas, while elements of PRIIPS is considered to directly contradict UCITS.
Four out of five managers do not currently have a central regulatory reporting capability, which is instead conducted via multiple teams, though the majority of these expect to create a more centralised function in the near future.
Duncan Spencer, Alpha FMC director, said: “One of the things that we found most interesting during our research was that, for asset managers, MiFID II is squarely positioned as the regulatory directive of primary concern for managers over the coming years.
“More generally, apart from the high implementation costs of ongoing regulatory compliance, most of the asset managers we’ve spoken to have bemoaned the lack of clear or consistent understanding of what each regulation is actually driving at. There is also scepticism as to the extent to which the regulatory agenda is being considered within the context of existing and future regulatory framework by policy makers.”
