Compliant data storage and workflows
Advisor360°
The holistic wealth management platform that accelerates your digital transformation
At a crossroads?
The Greek philosopher Heraclitus is quoted as saying, “change is the only constant in life.” It is how we adapt to and handle change that will determine success.?
Business-related regulations are ever evolving in our business, from ESG to the California Consumer Privacy Act to new rules from FINRA and the SEC. ??
In this issue, we examine the challenges around staying compliant and minimizing reputational risks in our fast-paced, digital world. ?
It’s a critically important conversation. We’re at a crossroads.??
As a head of wealth management put it recently, we are seeing a growing rate of technology change. Now couple that with developing regulations and change management processes. ?
How firms navigate these challenges will determine who will lose business and who will not only retain but gain advisors and their clients.?
Our contributors —Grant Piller , Scott Reddel , and Jed Maczuba —discuss the role that technology plays as the backbone of compliant retention, management, and availability of information.?
?
The role of technology in compliance?
While there is no one-size-fits-all approach to the use of technology in managing compliance, ignoring technology’s role is not an option. “The implementation of technology has become an integral component in the administration of a compliance program. Gone are the days of maintaining hardcopies in filing cabinets and conducting manual reviews of compliance tests,” said Tina Mitchell, Managing Director of Consulting Services at Core Compliance, in her article Managing Books and Records Through Technology. “Similar to the adoption of technology in the management of client relationships, client portfolios, and trades, compliance and technology has become a necessity in the modern era of administering an effective compliance program.” ?
When it comes to books and records, technology plays a big part in helping advisors safeguard information for their clients. This is especially pertinent as advisors are expected to be able to access and provide these documents easily while still doing so securely.?
For Scott Reddel, Managing Director at Accenture, technology’s role in compliance allows advisors to be more precise. “From a home office perspective, but even for the firms that have large advisor forces, really being able to mine this data and use it to be a bit more precise or predictive around your supervision capabilities, it doesn't feel so needle in a haystack.”?
In addition to technology helping advisors be more precise, it is also helping them be more efficient. “The reality of the situation is it saves us a lot of time in terms of preparing for audits, et cetera, client notes. That investment from a technology standpoint of digitizing information has significantly improved our efficiency both from a compliance record and making sure client information is appropriately detailed and taken care of right away,” said Grant Piller, Financial Planner and the owner of Piller Financial Group, MassMutual. ?
Technology in compliance is not just important but necessary. From safeguarding books and records to increasing precision and efficiencies, there is no doubt that the role technology plays in compliance is an extremely vital one that will continue to grow moving into the future.??
“Technology has become a necessity in the modern era of administering an effective compliance program.”?
?
Today’s industry challenges?
New developments are usually accompanied by growing pains. Jed Maczuba, Chief Technology Officer at Advisor360°, explains some of the challenges our industry faces today when it comes to compliance.?
First and foremost, it is important to note that there is not just one all-encompassing solution to the various pain points that may arise when thinking about compliance in this industry. He explains, “You need different solutions, and then as this technology is evolving, new solutions come in. I use the word integration, how do you stitch all this together in order to provide a holistic solution for ?clients? That's the challenge.” ?
Furthermore, broker-dealers are the ones shouldering the bulk of the responsibility to integrate all the various point solutions. “You put the onus on the broker-dealer to pull it all together as they are ultimately the ones who are accountable. Even if you outsource books and records —at the end of the day—they get the call to pull the data for an audit,” said Maczuba. ?
?“How do you stitch all this together in order to provide a holistic solution for clients?”?
?
领英推荐
Going above and beyond??
When it comes to the Financial Industry Regulatory Authority (FINRA), a minimum standard is set for firms to meet. While meeting this standard is good in terms of avoiding any fines or legal consequences, Maczuba states that firms should not be aiming to only meet standards but should be going above and beyond to build confidence in clients and be prepared for FINRA regulation changes. ?
?On doing more than the bare minimum, Maczuba says, “Ideally, you want to go above and beyond. FINRA wants to make sure you are doing the minimum, but part of this also is around instilling confidence in our clients.” Clients want to know that their information is being protected. ?
As far as the frequent changes in regulations, Maczuba detailed that it is imperative that those changes be assessed; however, he explained that by already going above the minimum standard, firms can be prepared and get ahead of the incoming changes. ?
We hope this conversation has inspired you to see how the industry is approaching technology and compliance challenges.?
Thank you for reading this month’s edition of our newsletter! To listen to these industry experts in a replay of the Advisor Tech Wish List webinar, click here .??
?
?About our contributors:?
?
Jed leads a globally distributed and diverse team of technologists responsible for building and operating the company’s market-leading, award-winning, innovative products and platform. Jed oversees Advisor360°’s Data, Platform, and Product Engineering teams and is responsible for accelerating research and development across the platform and spearheading development of future product capabilities.?
?
Grant holds a degree in business and political science from the University of Nebraska-Lincoln. With over 10+ years of financial planning experience, Grant is dedicated to connecting with his clients and creating unique plans to fit individual lifestyles. Grant was privileged to receive the 5 Star Wealth Manager Award for Best in Client Satisfaction in 2010, 2013, and 2015. Grant is among just 7% of the wealth managers in the Twin Cities area to be chosen for this award. Grant has been a Leaders Council Qualifier and a Million Dollar Round Table Qualifier every year since 2008.?
?
Scott is a managing director at Accenture and leads the North America Wealth Management practice. He brings 15+ years of experience partnering with wealth management, asset management, and private equity firms on strategy, M&A, new business launch, and transformation agendas. Scott serves as executive lead for Accenture’s top wealth transformation client initiatives and drives partnership engagement with the WealthTech and innovation ecosystem. Based in New York, Scott holds a BA in mathematics from Butler University and an MBA from NYU.?
Enjoyed this newsletter??
Learn more about our books and records solution HERE .
?