This is the first of what will be an ongoing blog entry focusing on everyone’s favorite topic: Compliance (ok, insert joke here). First things first, I feel compelled to dispel some of the myths behind what “compliance” is and what the role of compliance will be within our organization.
I have always found it interesting to see how people react when I say what I do for a living. When I tell people that I’m a Compliance Officer, I generally receive the same few responses of: 1.) “Oh boy, we have to watch what we say around this guy”, or 2.) “You are the guy who controls and rejects everything”, or 3.) “I feel bad for you”, or some combination of all three. I suppose these feelings could be based on past experiences with other Compliance Departments or Regulators, but is likely based on assumptions or folklore.
Compliance, by its Webster definition, is the act of conforming with official requirements. Regardless of what one does for work, every job has certain requirements, procedures or perhaps regulations that must be followed. As consumers, we would expect someone we engage who performs certain services for us to follow their procedures and requirements appropriately. For example, you wouldn’t want to hire an electrician to wire your house and not follow proper procedures or regulations as the results could be, well, shocking. How would you know if someone wiring your house was doing the right thing and following the right processes? We know that inspectors review such work and confirm the work was done appropriately. The role of a Compliance Officer works the same way in our industry as he or she is there to review and confirm our work is being done appropriately so we don’t get “shocked” later.
Our industry is filled with rules, regulations, policies and procedures—which can sometimes be confusing even to individuals who have been in the industry for decades! One of the main functions of a Compliance Officer is to help clarify the gray areas and provide guidance on how to comply while protecting the Company and its Advisors from potential regulatory risk. A good Compliance Officer seeks to understand a situation first and make a risk-based decision. If there is a situation that may be problematic, a good Compliance Officer seeks to partner with our Advisors or internal colleagues to come up with other potential solutions. Gone are the days where a Compliance Department is a “Just Say No” department. If a certain situation requires a “no”, there may be other things we can address to make it a “yes” while staying in compliance with industry standards.
Now that I’ve set a foundation, I plan to submit regular blog entries going forward. The intent is to give you a heads up on things that you should be aware of from a compliance perspective. This could be a food for thought type article, such as this one, or it may be directed towards certain hot-button regulatory issues or upcoming regulations you should be aware of.
Should you have any compliance questions, we are always here to help. Please feel free to send an email to email@example.com.