Clearer regulation and tax policy will drive wealth sector growth, KPMG finds

Simpler and more predictable regulation, clearer tax policies and improved financial literacy will help drive growth and innovation in the UK’s private banking and wealth management sector, a new report from KPMG has found.

The research from KPMG UK, PIMFA and UK Finance has revealed opportunities for how the government can further support the UK’s Private Banking and Wealth Management (PBWM) sector in helping to deliver growth, provided four key barriers can be addressed. 

Based on interviews with chief executives and senior leaders from across PBWM, financial advice and related services, ‘UK Private Banking and Wealth Management: Harnessing the Sector to Deliver Economic Growth’ outlines the reforms required to unlock the sector’s full potential. 

The findings reflect an industry consensus that the sector is not only equipped but also eager to support the government’s growth ambitions. However, this potential will remain untapped unless underlying structural challenges are addressed.

The report outlines four key priorities for reform that industry leaders say are essential to unlocking the sector’s full potential and helping deliver long-term, inclusive growth across the UK economy.

These are: 

• Fairer, proportionate regulation through more predictable policymaking and better coordination among regulators.
• Support for innovation and smarter compliance, leveraging technologies like AI and easing compliance burdens to drive growth.
• A clearer, more stable tax environment to encourage long-term saving, investment, and business growth.
• Improved financial literacy to boost public engagement and informed financial decision-making.

Daniel Barry, partner at KPMG UK, said: “While recent government and regulatory initiatives to promote the sector’s growth and competitiveness are welcome, the report highlights the need to do more. But this isn’t just about driving economic growth, it’s about supporting individuals to achieve their financial goals. 

“As risks to the UK’s financial stability are rising, the government has a significant opportunity to instil greater confidence among sector leaders at a time of great uncertainty and geopolitical volatility. Policymakers, supervisors and the sector must work together to both safeguard it and deliver growth.”

Liz Field, chief executive at PIMFA, added: “We welcome recent signals from government and regulators around growth and competitiveness, but there’s a concern across our sector that without a more stable, proportionate, and joined-up policy environment, we risk missing a vital opportunity to unlock investment, drive innovation and promote greater financial resilience across society. 

“Now is the time to go further, faster, and unlock the potential within the wealth management, financial advice and planning sector to unlock the growth we all want to see.”

Eric Leenders, managing director of personal finance at UK Finance, said: “This report provides a clear roadmap for how the wealth management and private banking sector can partner with the government to drive growth. It also makes clear that if we want more people to benefit from financial advice and long-term investing, we need to remove barriers, modernise regulation and really invest in improving financial literacy.”