There are moments in life where one realizes that life as we know it has changed, and there is no going back. However, many still can't help but wish for the good old days.
The era of putting seminars together for a mass audience without rigorous compliance review and approval is long gone. The times of operating a side business without the knowledge of your securities Broker Dealer are now something of the past. Compliance was much easier.
But our roles since those days have gone from simply reviewing and approving materials to now taking a risk management approach to each firm's written policies and procedures.
When Sales Outranks Compliance
Our job gets harder when firms do not do enough to build up the role of compliance in many day-to-day operations. At times, the Sales Force can end up regulating the extent of the firm's compliance authority. These are precisely the incidents that regulators look for — and they should be avoided at all cost. But it still happens within many firms.
In situations where the Sales Force has more clout than the compliance department, firms are leaving themselves open to real, potential dangers. This may seem obvious, but it is clearly still an issue — the yearly volume of regulatory sanctions says as much.
"It is understandable that a firm wants to cater to the hand that feeds it, but to what extent?"
These types of dynamics make compliance professionals nervous. We often wonder whether our role is taken seriously and whether we are leaving ourselves open to regulatory findings.
Questions Every Firm Should Ask
You might think your firm is different — that compliance is held at a higher standard. But consider the following questions honestly:
- Have top-producing managers ever threatened to take their business elsewhere, or used that leverage?
- How often is compliance involved in sales meetings at your firm — or even allowed to sit in during top management meetings?
- During the hiring process, how involved is compliance? Does compliance have the final word, and if so, how often is that authority actually exercised?
We are obviously not in Kansas anymore. It's time that we all recognize this. Life can never be the same. In this era, to run a successful business within the financial services industry, compliance needs to maintain a permanent seat at the leadership table — as a solid, integrated component of the firm's daily operations.