"GDPR will prove to be a ‘burden’ too heavy for some smaller companies, forcing them to exit the industry."

General Data Protection Regulation is a ‘game changer’ for the financial services industry and many small firms are unlikely to be fully compliant with the new rules, warns the boss of deVere Group.

Nigel Green, the founder and chief executive of deVere, believes that "GDPR will prove to be a ‘burden’ too heavy for some smaller companies, forcing them to exit the industry."

He also expects that "many smaller firms will be hit with hefty fines for failing to meet GDPR’s stringent standards".

Green said: “GDPR is a game changer for the financial services industry – the biggest shake-up I can remember.

“One of the main day-to-day ways GDPR will impact financial services is that no longer will firms be able to poach staff asking them to bring client data with them. Unfortunately, this has been a highly unethical modus operandi for many smaller financial companies for far too long. This is now no longer possible.

“Another key way that GDPR will affect the admin operations of financial services companies is the storage and management of the data. Holding data without good reason to do so will no longer be allowed."

Green added that despite having "ample notice", GDPR represents a fundamental shift for some companies' business models.

He continued: “It is likely that they will have found, and will continue to find, it difficult to dedicate the time and resources to getting this right and being fully compliant – especially as many are still struggling with the costs and demands of Mifid II and other complex regulatory reforms.

“GDPR represents a watershed moment for the financial services sector. This is an opportunity for all firms to redouble their efforts to overhaul their business practices where necessary, ensuring the clients’ interests are always front and centre.”