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Comply or die: NRS upgrades 'manual' to the 21st century

Policy Architect will help advisory firms and broker-dealers keep policy manuals up to date, among other features

Apr 17, 2013 @ 12:01 am

By Davis Janowski

National Regulatory Services announced availability Tuesday of their new Policy Architect Module.

Sounds like one sexy beast does it not?

That was just to keep the eyes from glazing over among any fair-weather readers of this blog.

So perk up. Here's another reason to pay attention.

In July 2012, more than 1,000 advisers responded to our second annual InvestmentNews survey on technology usage and satisfaction.

Among respondents, 68.1% said they used no compliance software at all.

Getting back to the new module, it is a component of NRS's ComplianceGuardian suite and is fully integrated with its other existing components.

Simply put, Policy Architect is meant to help both registered investment advisers and those affiliated with a broker-dealer stay compliant by allowing for more frequent updating of a firm's compliance manuals (it helps, of course, if you keep yours digital as opposed to cutting down trees for a binder).

“Many firms just don't have the resources available to constantly revise and update manuals with the regularity needed to stay current with compliance guidelines and that is where Policy Architect comes in,” said NRS managing director John Gebauer in an interview.

He said that around 2,000 firms are currently using the ComplianceGuardian suite.

The real meat here is not just that the new module helps you update your own internal firm guidelines but in how those guidlines can be uploaded into ComplianceGuardian where they will be meshed with ongoing regulatory changes being tracked by NRS, including its quarterly updates.

Mr. Gebauer explained that part of the genesis of Policy Architect came out of a desire by firms that wanted to add additional, customized content.

“What we have created is really a full-fledged content management system that is built on proprietary technology,” he said.

Too many firms, he argued, have relied over the years on simply updating internally-created or worse, consultant-created Microsoft Word files.

“It [Policy Architect] strips the technology from the content we provide so that firms can create any manual they want and manage it the same way, and if it is about a specific regulatory topic they can then, in turn connect it with [our] updates to that topic as well,” Mr. Gebauer said.

The module also acts as a means for distributing updates to employees, obtaining attestations and maintaining a recordkeeping audit trail (including a date and time stamp to each new version of a manual).

And the module has a customizable e-mail tool that allows firms to notify users of manual changes and attestation requirements.

Those administering the system can control permission settings to ensure specific individuals or groups have access to appropriate, applicable content as well.

“The Policy Architect module adds a whole other layer of flexibility for larger firms or those that specialize in particular areas requiring that their manuals and documentation have additional customization,” he said.

Other aspects that the system more flexible are fairly simple but important, for instance the way it is architected allows those managing manuals to easily make connections to NRS's regulatory index where they find links to Finra or SEC documentation and embed them right into a document.

Similarly, there are mail merge features that allow you to put in particular titles or names of responsible parties at a firm without having to manually enter them dozens or hundreds of times throughout a document.

Some of these features are a result ComplianceGuardian being built on top of the Microsoft .Net framework, which allows for easy addition of such features. The suite runs off of a SQL Server database on the backend.


An annual license for the Compliance Guardian platform starts at around $1,500 for a firm for up to 50 users. The price goes up as a firm adds modules or needs additional users beyond 50.

“The most common collection of modules is approximately a $3,000 annual fee,” Mr. Gebauer said.

Separate specific pricing for Policy Architect has not yet been announced.

Not enough love

Compliance software in the advisory and broker-dealer sectors often does not get the love it deserves but the thing is, no matter how you slice it firms are likely to be buying more of it in the next year or two, thanks to what is going on in Washington.

Going back to our technology survey, so if 68.1% of advisers selected “none,” what choice among the responses in the compliance category garnered the most affirmative returns?

Proprietary software, things developed in-house, in other words, and that was only selected by 6% of respondents (It can be noted that the third most common selection with 5% of respondents was another NRS product, ComplianceMax).

Despite the great variety of differentiation and fragmentation among advisory firms pursuit of a proprietary methodology simply will not have long-term legs.

With changes to the regulatory environment it is likely many firms will be propelled if not compelled toward adoption of something.

For more information check out pages for the NRS Policy Architect module online.


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