Steady growth in turnover is being seen by the South’s financial sector, according to research by accountancy and investment management group Smith & Williamson.
However, concerns over recruitment, regulatory matters and tax remain, despite the buoyant findings.
Just under 120 people participated in this year’s financial services and markets group survey by the firm, which has its 50-strong South Coast office in Southampton.
The survey found that:
· 59% of respondents reported an increase in turnover over the last 12 months
· 45% expect to make more hires over the next year
· 6% plan to reduce their workforce, compared to a much higher 20% last year
Andrew Edmonds, head of assurance and business services in Southampton, welcomed the findings.
He said: “The sector here in the South, including Southampton, appears far more buoyant than in previous years, although many firms do continue to feel the pressure on both costs and fees.
“In addition, when it comes to firms looking to hire additional staff, the competition for high-quality employees could make attracting and recruiting suitably qualified people challenging.
“Indeed, 43% of firms reported that recruiting and retaining suitably qualified staff is a key concern.
This year, regulation was the number one concern for respondents for the first time since 2010.
Nearly two thirds of respondents expect regulatory requirements to have the most impact on their business; 40% anticipate revenues will be affected.
Andrew said: “With the overarching aims of consumer protection and market stability, regulatory complexity is unlikely to reduce in the short term.
“Significant changes in regulation have, and will, occur in 2014, with yet more change anticipated in 2015.
“As regulation becomes increasingly complex, financial services business will continue to face more elaborate requirements to demonstrate compliance, which is likely to increase time spent and costs; over three quarters of those surveyed anticipate higher compliance costs as a result of regulatory change.”
For the second year running, interviewees have identified UK corporation tax as the biggest tax issue facing their business. Income tax, VAT and employment taxes also rank highly as key taxes affecting the financial sector.
Andrew said: “Despite respondents’ reservations, the ‘swings and roundabouts’ of all the UK’s taxes combined has, in many cases, had the net effect of a slight reduction in the overall tax burden of late.
“Given this, although tax is getting more and more complicated, the UK remains a relatively good place to do business.”
Respondents were mainly drawn from the investment management, banking and securities sector.
