Compliance - the business prevention department? - Organised You
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Compliance – the business prevention department?

Compliance – the business prevention department?

Let me start out being straight with you. I complete compliance support services for a number of IFA firms so I have a natural bias on this particular topic. However,as it so happens it’s probably not what you’d expect.

I really don’t like compliance.

Or at least, I like what it’s trying to do, just not how it goes about it.

The dictionary definition of the word compliance is: “The action or fact of complying with a wish or a command”.

So basically, compliance is: doing as you are told. I don’t think there has ever been a situation where I’ve seen people or businesses performing at their best because they’re doing what they are told.

I constantly come across Financial Advisers – excellent advisers –  who are giving their clients good advice but instantly turn off as soon as the word “compliance” is mentioned. And who can blame them? I have been working in the Financial Services industry for twenty years and I understand where they are coming from.

I’ve seen the file checks that have come back with ridiculous ‘nit picky’ responses, I’ve made endless changes to suitability reports that I know clients won’t read, and I’ve dealt with many, many, compliance people who have never actually worked as a financial adviser or in an adviser firm themselves, and who are suggesting something from their bit of paper that won’t actually work in practice.

It all adds up to frustration, and a feeling of unnecessary red tape, that just gets in the way of what the advisers want to do: help their clients.

However, I do believe, for my sins, that that compliance done right can really help a business rather than hinder it. Over the same years that I’ve experienced those above frustrations, I’ve watched the industry change from sales-driven to service-driven. I’ve seen advisers complain profusely about the annual review requirements, only to be overwhelmed by the new business it has generated and how engaged their clients are. I’ve come across firms that have created more structure in their business due to compliance requirements, and who understand their own business better due to KPI and MI reporting requirements, and firms who get trainee advisers who start writing new business faster  because of good T&C controls.

If there was one single thing that would make my job easier, it would be a memory eraser. If my clients had no preconceptions, or bad experiences of compliance and what it involved, then I believe I could actually engage them in what  compliance is meant to be about: making your business and the clients experience of dealing with it, the best it can possibly be.

When you take a few steps back and look at compliance from a distance, it’s simply about having effective systems and processes that enable you to manage your business well, minimise risk, and keep clients happy. Take the word “compliance” out of the equation and you might actually consider these to be good business objectives! Compliance is a necessary and relevant part of the financial sector, but it needs to be applied with common sense and a mentality of improving your business, instead of the instant sense of dread and foreboding.

It also really needs a different name.

One of my clients advised me that at his old firm they referred to the Compliance Department as the “Business Prevention Department,” which made me chuckle. I plan on getting our clients to think of it more as the “Business Development Department.” Even if it may take a while!



Karlene Rivers