Response to the Professional Standards and Compliance Reform consultation

The dominant day to day impact is a resourcing squeeze. Around a third of members say they would have to redirect fee earning staff onto implementation, which they say they cannot really afford, and a further group of smaller operators say the burden would fall on the owner or senior individual working evenings. This points to a real capacity risk, particularly for smaller firms without slack in the system. Larger or more structured respondents describe the reforms as a significant organisational undertaking rather than a light touch adjustment. They would run it as a formal change programme across offices, restructure teams around new processes over a period of months, or manage it as a governance workstream reporting to the board. Leadership should expect implementation timelines measured in months, and consider transitional support, phased timelines, or resourcing relief to reduce the hit on client delivery.

Members are broadly supportive of the direction of the reforms but consistently ask for changes that would make implementation realistic alongside fee earning work. The single largest ask is a longer lead in period so practices can plan the transition into their workflow rather than absorb it on top of existing commitments. Early publication of the technical specification is the next priority, so firms can build any integration once rather than repeatedly, and a similar volume of members want a competence based approach to training so they can develop their own people rather than route them through a fixed course list. Two further asks recur and matter disproportionately to smaller practices. Requirements need to be proportionate to firm size, because obligations designed for larger practices are experienced as crushing by sole practitioners and small teams. Members also want the timetable coordinated with other regulatory changes in train, so reforms do not all land at once. Acting on these five points would materially improve workability and reduce the risk of poor compliance driven by capacity rather than intent.

Members consistently report that the first-year cost is significant, but they frame it in four distinct ways. The largest group points to people rather than technology, noting that systems can be procured cheaply while the staff to operate them cannot. A near equal group warns that the sum exceeds what a quiet trading month generates, leaving no obvious way to absorb it. Others treat the reforms as a programme spend to be spread across two budget years, while a further group highlights the indirect cost of diverted client work. For leadership, the message is that headline system prices will understate the true impact. Any government engagement should stress labour costs, cashflow strain on smaller practices, phased implementation to allow two year budgeting, and the productivity hit from time pulled away from fee earning work.

Readiness across the membership is uneven but clusters into four recognisable positions. Around half of respondents report some form of active preparation, either with a named lead and a plan, or with work underway that is being slowed by the fact that the few people who understand the change are already stretched. A further sizeable group say they are about as ready as they can be while the rules remain in draft, signalling that further progress is gated on regulatory clarity rather than internal will. Roughly a quarter have not started beyond reading the consultation, which points to a meaningful tail of organisations at risk if timelines tighten. Overall, no group reports being fully ready, and confidence is conditional on the final text. For leadership, the actionable read is twofold. First, the binding constraint for the engaged majority is not appetite but two external factors, namely finalised rules and scarce internal expertise, so pressing government for early clarity and offering shared implementation resources, templates and worked examples would unlock progress quickly. Second, the group that has not started needs a lower barrier to entry, such as a short getting started guide, peer support and clear minimum steps, to prevent a widening gap between prepared and unprepared members as the deadline approaches.

Members are asking the Institute to reduce the practical cost of compliance rather than simply explain it. The strongest asks are for ready to use template policies and a shared compliance service that smaller firms could buy into collectively, followed closely by early, clear guidance so members are not spending money working out what is expected of them. Together these three account for roughly three quarters of responses and point to a clear demand for tangible, off the shelf support. Alongside the practical asks, a sizeable group want the Institute to use its voice externally, specifically to press the proportionality argument so requirements are not applied uniformly regardless of firm size or risk. A smaller but consistent group flag a training gap at middle management level. Leadership should consider prioritising template production and scoping a shared service offer, while committing to early guidance and a visible proportionality position in external engagement.

Members are asking government for a regulatory approach that reflects the reality of how most of them operate. The single strongest message is that rules must be workable for very small practices, not only for organisations with dedicated compliance functions. Alongside this, members want a realistic implementation timetable so they can comply properly, and they want the detailed rules published early and then held stable so they can plan against them. Proportionality is raised repeatedly, with members noting it should apply to obligations as well as expectations. A smaller but clear group flags that the skills government assumes are available in the market are not actually there. Taken together, the responses point to a call for pragmatic rule design, stable guidance issued in good time, and honest recognition of capacity constraints.

The dominant read is that new entrants are arriving better prepared technically than in previous generations, but noticeably less comfortable in client-facing situations. Once trained, a significant share move on to industry within a few years, which members link to a smaller overall pipeline and to a generation that expects structured training, clear progression, and a different balance in working life. Firms are increasingly competing for the same limited pool. For leadership, the actionable signal is twofold. First, invest in structured client-skills development early, since technical training alone is no longer the gap. Second, treat retention as a design problem, not a loyalty problem. Formalising progression, being explicit about development pathways, and adapting working patterns are now baseline expectations if the profession wants to hold onto people beyond the three-year mark.

Members are describing a capacity crisis. Around a third say they simply have no time left to absorb anything new, and this sits alongside a heavy load of regulatory change arriving in a single window. Together these two themes account for close to six in ten responses, suggesting the sector feels it is being asked to implement more than it can realistically deliver at current staffing and cost levels. Financial pressure from rising fixed costs and difficulty hiring and holding onto capable staff compound the problem, while multi-site organisations flag the added challenge of rolling change out consistently. For leadership, the practical implications are to push for better sequencing and phasing of regulatory demands, to make the case on cost pressures, and to support members on workforce and multi-site implementation. Any new asks placed on members in the near term should be stress tested against the capacity picture these responses describe.