As the regulatory environment in the financial services sector continues to evolve, keeping up with a steadily growing list of compliance responsibilities is a major challenge for financial advisors.

Advisors depend on their firm to manage these changing requirements. And the results of this year’s Report Card series show that some advisors were pleased with the resources they have in this matter, while others said that regardless of the tools available, keeping up is almost impossible.

“[Keeping on top of regulatory changes] is like drinking water from a fire hose right now,” says an advisor in Atlantic Canada with Waterloo, Ont.-based Sun Life Financial (Canada) Inc.: “There’s so much [regulatory change].”

The onslaught of recent regulatory changes is a challenge for advisors’ firms as well.

“[Regulation] is a constantly evolving environment,” says Michael Walker, vice president and head of branch investments with Toronto-based Royal Bank of Canada (RBC). “We all know there’s more on the horizon. The only constant is change – and [the challenge is] just preparing ourselves to absorb that change.”

Advisors appeared to have a positive and constructive relationship with the compliance staff at their firms, as the overall average performance rating in the “advisor’s relationship with compliance department” category has held steady over the past few years; the overall average rating in that category was 8.8 this year. That said, the category’s overall average importance rating rose to 9.3 in 2016 from 9.0 in 2015.

Although advisors admitted their compliance responsibilities can be demanding, many said they understand that their compliance staff is only trying to help.

“Compliance is our friend; not our enemy,” says an advisor on the Prairies with Toronto-based Richardson GMP Ltd. “They just want to make sure we’re not in the news for the wrong reasons.”

As a result, the support that advisors receive from their compliance staff in keeping up with the regulatory changes also has increased. This is apparent in the overall average importance rating in the “support for dealing with changes in the regulatory environment” category rising to 9.2 this year from 9.0 last year. In addition, advisors gave their firms an overall average performance rating of 8.7 in the category this year, up from 8.5 last year.

The banks appear to be doing a particularly good job of this. Advisors in that channel gave their firms an average performance rating of 9.1 – higher than in any other channel – in the category.

Advisors with Canada’s Big Six banks praised their firms for providing ample resources for navigating regulatory changes well before the changes take effect.

“We’ve had lots and lots of training,” says an RBC advisor in British Columbia.

RBC focuses on being proactive regarding regulatory changes, Walker says. For example, the bank began helping its advisors prepare for the second phase of the client relationship model (CRM2) more than two years ago, when the proposals were introduced.

“[We’re] being very proactive and talking about it well in advance of these changes coming into being,” Walker says.

Insurance agents indicated that they don’t receive nearly enough advance notice of looming regulatory changes. Some advisors even have trouble getting hold of their compliance staff.

Insurance agents also appear to be pushing back harder against regulatory change compared with advisors in other channels.

“The regulatory demands on us are far too great,” says an advisor in Ontario with London, Ont.-based Freedom 55 Financial. “It’s harming the industry.”

Mike Cunneen, senior vice president of Freedom 55’s wealth and estate planning group, says the firm focuses on helping its advisors manage their compliance responsibilities. That includes helping advisors adapt to more rigid processes and procedures while recognizing the benefits of that approach.

“We’re continuing to work hard with advisors,” he says, “to help them understand the importance of [compliance].”

© 2016 Investment Executive. All rights reserved.