Do Financial Consulting Services Need More Regulation?

The global economic recession of 2008 came as a massive shock to a world that had mislead itself into thinking that progress was the order of the day. The economies of the world took a massive turn for the worse and so did the lives of many. In the aftermath of all of this, many sought someone who should take the blame for all of the wrong that had happened. One of the likely scapegoats in this catastrophe was the sphere of financial consulting services.

These are professional firms that have based their entire business model on the notion that they have much greater insight into how the market works. They leverage their purported ability to provide a clear understanding of market forces and trends. They have created such a powerful niche in the world of business that there is no mega-corporation that has not invested heavily in consulting services. The blow back from all of this resulted in pushes for increased regulation of the financial consultancy service providers and industry. However, there are those that have questioned the usefulness of increased regulations.

The reality is that increasingly complex regulations will not have the desired impact. Here is why.

Financial consulting services are targeted at a specific bottom line

Financial consultancy is a massive growth industry because they are experts at capital gains and growth. These firms are brought in with the sole intention of helping companies to become leaner and meaner machines that bring in better returns on investment yearly. These firms have performed quite outstandingly in this category. The companies that have used these services have seen massive growth and increased profitability. Financial consultancy has little to do with the overall health and stability of the economy, and it is, therefore, wrong to single them out for increased regulation.

Consulting services are behind the economic recovery

The economic recovery has been spearheaded by an increased number of small and midsized enterprises. These are companies that are led by the entrepreneurial segment of the market. These entrepreneurs, while full of innovative ideas, need someone to direct them onto the financial success pathway. This is where consultancy companies have helped the market by providing a guiding hand to help entrepreneurs to navigate the increasingly complicated finance market.

Financial consulting is a beneficial product that is intended to assist capital accumulation, utilization, and growth. These services are an important part of the reason why the economy is recovering.