If there’s one thing that executives would prefer not to hear about it’s more regulation. Government regulation almost always means more costs to doing business. It usually hurts the bottom line, which is never good for a corporation. In the aftermath of the financial crisis a few years ago, the government championed and passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Its goal was to prevent another serious financial crisis like the one that preceded the legislation.
Political pundits cried foul and still yell and scream about regulation crushing business. Of course, if you’ve been around long enough, you know that things are never as simple as the talking heads make them out to be.
What Are People Who Deal with the Act Saying?
Ultimately, it’s best to ask those in the financial industry who are encountering the Dodd-Frank law about how it is affecting them. Then, you take a look at their numbers to see if what they are saying adds up. The fear was that hiring compliance officers and distractions from management would hinder those working in the financial sector, and ultimately affect the bottom lines of their company and the investments of their clients. But those fears might have been exaggerated.
According to BusinessWeek, a law professor from the University of St. Thomas sent out a survey to fund advisers to gauge how the Dodd-Frank regulations were affecting them. Based on his results so far, it turns out that the regulations aren’t really affecting the bottom line.
That’s Good News.
In fact, a lot of the respondents don’t even have a response to the Dodd-Frank regulations planned at all. It seems that they are able to get their work done in a manner that is unhampered by the regulations. Ultimately, the costs of adhering to the regulations does not break the bank and does not prevent hedge fund managers in the finance sector from being successful at their jobs.
Keep an Eye on it.
The Dodd-Frank Reform is a huge bill. There are many industries and activities that it regulates. The work of fund managers and other investment managers in the financial sector is just a fraction of what it covers. But if this early survey and information is an indication of the financial impact on the industries in question, there might be a lot less to fear from Dodd-Frank than people had initially thought.
It will be important for managers and executives to stay up-to-date with how their own corporations are dealing with the new regulations. The best course of action is definitely not to whine and complain about the law as the pundits did, and still do to a certain extent. What seems logical is to address the regulations head on and make sure you do everything you can to keep the impact minimal to your company.
For more information about the Dodd-Frank regulation, visit the referenced article from Businessweek.com.
Have you been affected by the Dodd-Frank Law? Lets us know in the comments below.