Roundtable poll shows 24% firms not ready for Mifid

Compliance can add value, say private wealth bankers

BRUSSELS - In a recent poll at the Odyssey Financial Technologies roundtable, Trends in Global Wealth Management, only 24% of the 200-strong audience – comprised mainly of European tier one bankers – said they were ready for the Markets in Financial Instruments Directive (Mifid). However, more than half agreed compliance could add value to their businesses. Most roundtable participants thought that the requirement to demonstrate best execution under Mifid could help define best practice for advisory processes within banks, and that transparency could become a competitive differentiator.

Even firms operating outside Mifid jurisdiction are approaching the directive as a commonsense framework. Some roundtable participants claimed it has the potential to protect them from client lawsuits over poor asset performance.

Concerns were also expressed that different interpretations of Mifid are preventing some firms from being 100% compliant. While some banks are calling for benchmarking around best execution, others, such as Morgan Stanley’s international private wealth management division, see regulatory interpretation as a means of competitive differentiation.

When asked whether they saw compliance as a business opportunity or a constraint, roundtable participants maintained it is only beneficial if well applied and functional. However, the reality for many is that it is difficult to reach internal consensus on how to best implement compliance, causing delays that make it appear to be more of a constraint.