A lax attitude toward enforcement under the Trump administration has asset managers more focused on reputational risks than on compliance concerns, according to a survey of executives at hedge funds and private equity funds. The survey of 200 executives by financial services technology firm Koger Inc. found 56% said regulatory enforcement has decreased since Donald Trump became U.S. president; 85% said the U.S. regulatory climate is more relaxed than the international one.
More than three-quarters of respondents said the reduced regulatory concern meant compliance issues are not as significant as they were in the past; 52% said they are more focused on reputational risk the last six months than regulatory risk. Most don’t think the relaxed attitude will last, as 73% said they expect a new administration to strengthen enforcement in the future. “Today’s environment has led in the short term to somewhat less of a worry about compliance vs. reputational risk, though that scenario could change,” said Ras Sipko, Koger’s chief operating officer, in a statement.