In a post-fiduciary world, the difference between adequate and robust compliance processes will make or break your firm's ability to stay on top of new rules, including the Department of Labor's fiduciary rule and revised ADV disclosure requirements.
Advisers today are faced with a daily laundry-list of demands on their time, and it can be increasingly difficult to perform the tasks that are crucial to compliance, from gathering ever-increasing amounts of data about your investment process and social media to disclosure delivery. Institutional memory isn't enough. Luckily, there is technology available to automate many of these processes and save advisers' most valuable resource: time. Yet it can be hard to find an off-the-shelf product to meet all business requirements, while also providing risk protection and the customizability needed to tailor it for your firm.
By completing a technology audit, you can ensure your firm is taking the necessary steps to meet new and changing compliance requirements. Plus, taking an honest look at where your firm stands will shine a light on potential gaps before they become too large to handle. We recommend three steps in your firm's audit:
1. Start by examining your current technology systems and considering whether they have the adequate foundation and tools needed to track information and provide disclosures. If your current technology is out of date, it's likely time to invest in an upgrade in order to better meet your current and future needs. Having an up-to-date, cloud-based product in place that provides capabilities beyond the basics will make it easier to ensure your firm remains compliant, while day-to-day operations run smoothly.
2. Next, seek opportunities to standardize common processes such as your sales approach, onboarding new clients, opening new accounts and conducting compliance reviews. By using systems to automate work and drive next steps, you'll more easily build a team focused on developing new business and serving clients — areas that drive growth.
3. Lastly, anticipate changing future needs. Regulatory rules are a moving target and no one can predict how they'll shift, so having flexible technology in place will play a significant role in firms' ability to adjust to any and all rule changes.
While each of these steps is vital in providing seamless and accurate client reporting, the efforts are wasted if your firm doesn't have dedicated personnel who understands how to operate and implement the processes outlined above. Having the right people in place, with executive support behind them, is key to successfully adapting in today's industry environment. You won't get value from technology just by writing a check.
In this constantly changing environment, we know compliance is generally well-meaning, and the increased scrutiny imposed by new rules offers advisers the opportunity to identify any roadblocks on the technology front that need to be addressed. A technology audit, backed by the right people in a firm, can ensure you are adaptable regardless of the compliance environment.
Sayer Martin is chief operations officer and co-chief technology officer at Orchestrate.