The growing compliance burden is time consuming and costly for financial advisers. But there are some strategies to meet your obligations.
Cheyenne Walker, managing director of Australian Independent Compliance Solutions recommends starting by making sure that compliance obligations are embedded into daily workflows and templates rather than added as bolt-ons.
“We all know that every practice operates a little differently. I need to understand how the adviser operates, how they implement the advice process, what tools and templates they are using, what they call their advice documents – it all matters,” Walker says.
Risky business
Advisers need to understand that building compliance processes into existing operations means no downtime.
“Regtech and AI can improve both compliance standards and increase productivity; however, if regtech isn’t implemented compliantly, the digitisation brings new threats, more noticeably cyber-attacks,” Walker says.
Also, be sure to take a risk-based approach to building compliance programs, to avoid a once-size-fits-all program.
“This approach directs resourcing into areas where they are needed the most to address non-compliance and not overloading unnecessary requirements on the more compliant advisers,” Walker says.
“It promotes and frees up time for the advisers doing the right thing – cuts the red tape and lets them get on with their job of seeing clients,” Walker said.
Advisers should also conduct regular small compliance check-ins, which can lower the disruption to advisers but satisfy the licensee’s obligations to monitor and supervise the core activities.
“I do this by auditing one client file every quarter per adviser instead of three files once a year. This allows progress results along the way to show improvements,” Walker says.
Leverage, not load
Advisers need to be viewing compliance as leverage, not load, according to adviser Justin Hooper, of Lifestyle Led Wealth.
“Being part of a national advisory firm like Infocus makes that doable,” Hooper says.
“Their tech [PlatformPlus], QA support, and training are all built into the framework, so we’re not constantly reinventing the wheel. It frees us up to focus on clients, knowing we’re covered from a compliance perspective.”
“You want to be using systems and processes that mirror how advice is actually delivered, so compliance happens in real time. We don’t want to be fixing things three weeks later, we want to get it right as we go.”
Hooper adds: “While tech does a lot of the heavy lifting, it’s the human touch that keeps everything sharp.”
He says automating the basics – like disclosures and audit trails – is a no-brainer these days.
“But it’s that real-time feedback from QA that really makes the difference,” he says.
“It helps us catch the little things early before they turn into rework or risk.”
Automate processes
Evalesco general manager Belinda Marley-Wallace says her firm has found success by combining smart tools with human oversight, automating things like file audits and reporting to create consistency, while still applying judgment where it counts.
“It’s not just about ticking boxes; it’s about making sure the advice we give is high quality, appropriate, and in our clients’ best interests,” she says.
Marley-Wallace says advisers should not view compliance as a hurdle, and instead remember it’s the guardrails that let you drive faster and safer.
“Shifting to a more proactive model has been a game-changer for us,” she says.
“Pre-vetting advice, rather than dealing with problems after the fact, saves time and reduces stress for everyone. And while compliance is a team effort, having clear ownership and accountability helps ensure there’s direction and clarity when it comes to interpreting the rules and putting them into practice so that what reaches the client is aligned, considered, and above all, trusted.”
Don’t overcomplicate
Rhett Das, managing director of Integrity Compliance, adds that firms aiming for personalisation need to realise that this can complicate processes.
“A lot of business owners want to personalise things for their business, which is great, however they don’t always understand what legislation means or requires and end up making mistakes when they start to modify things, processes, or try to cut a corner,” Das says.
“If someone offers you a solution and it works, don’t spend hours modifying it or arguing why it should be changed, it wastes your time and energy and it can also end up becoming unfit for purpose and can crush productivity when you have to unpick things. It’s a bit like watching a teenager modify their car and the car performance worse after the modification.”
Instead, Das suggests investing time in keeping up to date with obligations and, knowing this is an ongoing journey, pace yourself.
“Like anything on the journey, you will get better at things and need to learn new things,” he says.
“You will set yourself up for failure if you expect compliance obligations are a destination. You’ll probably discover new ways and better ways to do things on that journey so don’t think you’ve mastered something, as it will probably change.”
