Where am I? 
Home Protection Marketing Compliance
Categories: Compliance| Better Business
Jason Kirk, senior compliance field manager at SimplyBiz, explains how to get the most value out of your compliance visits...
After 14 years spent in financial services compliance, the last 12 conducting visits to FSA regulated firms, I have begun to think that people in my line of work have quite a lot in common with dentists (don’t worry, this is not the lead in to a ‘gap-filling’ gag!).
Firstly, nobody is ever happy to see us. Secondly, we can tell that when you are saying ”Hmm, yes I’ll definitely start flossing every day / making better use of my back-office system” that at least 50% of you are thinking “Phew, thank goodness that is over and done with, I’ll start thinking about what you’ve advised me do in another six months, when I’m due to see you next”.
Finally, – and I cannot speak for all dentists here – but most of us compliance field managers do not enjoy causing you additional suffering and work – we want to help!
It is impossible to hope that I can persuade advisers to start looking forward to their compliance visits, but hopefully by the end of this article you will know the best ways to practically prepare for one, the type of things you should expect on the day and how to get the most value out of your visit.
Firstly, you should never lose sight of the fact that it is your compliance visit. That is not just a platitude, but the key to taking ownership of the day and seeing it as an opportunity for you to get what you need to keep your business running in a compliant manner (one less thing for you to have to think about), rather than something which is being inflicted upon you.
A positive way in which to prepare for your visit is to speak to the compliance field manager who will be coming to see you in advance of the visit itself. This will allow you to cover two important issues well in advance; agreeing the agenda for the day and understanding the practicalities of the visit.
Whether you have chosen to receive a visit based around a particular theme or just an overall health-check, there will be specific areas which need more focus – take on board the compliance field manager’s recommendations as they should be fully up to date on any new FSA regulatory focus and have significant experience of many other similar visits, so they can tell you what has worked well when they have seen firms with similar circumstances.
However, you should also feel entirely comfortable with making your own suggestions – after all, nobody else knows your business and practices as well as you do.
At the end of this conversation, you should have an agenda for the visit agreed upon by both parties, meaning not only that the time can be used much more effectively on the day but that you can also feel confident that you are both approaching the day from the same angle.
Something else which you should cover at this point includes how much of the day you and your colleagues will need to leave available for the visit – for some of the time, the compliance field manager will usually go through files and documentation, during which you need not be present – likewise, it will be frustrating for both you and the adviser if you have not cleared the day sufficiently to be on hand when you are needed.
This conversation would also be a useful time to discuss what material the adviser will need to access – for obvious reasons, normally they will not just review a couple of pre-selected files, and they should be able to give you a general overview of what they will want to see.
Of course the needs of each firm, and therefore the precise points addressed in each compliance visit, are never exactly the same, however, the most popular areas that my team and I have been asked to cover in the past 12 months include; assistance with T&C plans, guidance on anti money laundering and annual compliance reports, reviewing disaster recovery procedures, and monitoring progress and procedures to help to demonstrate the firm is treating its customers fairly.
| Share | |
| Comment | When an inspector calls: How to get the most out of your compliance visit |
More from professional adviser
Email alerts
Recommended reading
Categories
Topics
Comments
A LAWYER'S VIEW
Interesting article – from a regulatory lawyer’s point of view defending you IFAs, you should take heed of this. But, sadly, as I am sure that Jason Kirk will no doubt agree too many IFAs delay or don’t even start the recommended regulatory flossing program when advised! And, Jason, if you think that IFAs may not be happy seeing you, how on earth do you think they view me when I darken their doorsteps ! For those firms which have not experienced a Supervision visit from the FSA let me caution them to take the time provided to check not only that their sales are compliant but also that the files clearly show that they were and are complaint. Firms who have had a Supervision visit, for instance in relation to traded endowments or the promotion of UCIS, will already know what they can expect. The basic problem with the regulatory system that IFAs have to follow is that it is based on generically worded Principles for Business and very specific but mostly opaquely complex Rules. Interpretation of these Principles is open to entirely subjective interpretation by the Investigating Officer. The Rules are very long on specifying the IFAs duties, responsibilities, what he has to do and when. They are somewhat short on any guidance let alone actual prescription as to how the IFA goes about his job. The obligation on the IFA is to know his client and to gather sufficient information to enable him to give suitable advice to be confirmed in a statement of demands and needs. There is absolutely no guidance as to how that information is recorded, and how it is presented. Anticipating that you may be selected for a Supervision visit you can prepare now – your records already are what they are, but you can use the time allowed to ensure that the right documentation is in the right place. You should also use the intervening period to ensure that you are fully acquainted with the COBS not only as regards the general import of the Rules but also that you know the actual clause numbering of the various Rules that apply. I have a number of UCIS cases where there is a real issue with the FSA claiming the IFA did not know the Rules when clearly he understood what they required him to do although he may not have been able to recite the clause and sub-clause numbering. Preparing for an Investigation isn’t a process that starts the day before, or the week before. It should be undertaken from the very outset of trading – read Jason’s article and learn! - but, in this instance, you have advance notice from the FSA. Know the Rules and how to apply the Rules. But above all, record the fact that you know them and have followed them. Remember, if it’s not on paper, then it didn’t happen.
Posted by: Alasdair Sampson
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
This year we have 14 awards designed to mark out the very best products in a highly competitive and innovative market. This includes three new awards for 2011 to reflect the developments in this rapidly growing market: Best Dual/Multi-Index Product, Best Structured (Oeic) Fund and Best Structured Product Provider.
Events
Poll
|
|
Job search
Ifaonlinejobs will open the right investment career path for you. Search hundreds of vacancies on www.ifaonlinejobs.co.uk now
In Focus
Two months left before the ‘real RDR deadline’ – are you compliant with the required professional...
Viewpoints
2012 marks a watershed for the Life companies, fund managers, banks and advisers who service...
sponsored by
A LAWYER'S VIEW
Interesting article – from a regulatory lawyer’s point of view defending you IFAs, you should take heed of this. But, sadly, as I am sure that Jason Kirk will no doubt agree too many IFAs delay or don’t even start the recommended regulatory flossing program when advised! And, Jason, if you think that IFAs may not be happy seeing you, how on earth do you think they view me when I darken their doorsteps ! For those firms which have not experienced a Supervision visit from the FSA let me caution them to take the time provided to check not only that their sales are compliant but also that the files clearly show that they were and are complaint. Firms who have had a Supervision visit, for instance in relation to traded endowments or the promotion of UCIS, will already know what they can expect. The basic problem with the regulatory system that IFAs have to follow is that it is based on generically worded Principles for Business and very specific but mostly opaquely complex Rules. Interpretation of these Principles is open to entirely subjective interpretation by the Investigating Officer. The Rules are very long on specifying the IFAs duties, responsibilities, what he has to do and when. They are somewhat short on any guidance let alone actual prescription as to how the IFA goes about his job. The obligation on the IFA is to know his client and to gather sufficient information to enable him to give suitable advice to be confirmed in a statement of demands and needs. There is absolutely no guidance as to how that information is recorded, and how it is presented. Anticipating that you may be selected for a Supervision visit you can prepare now – your records already are what they are, but you can use the time allowed to ensure that the right documentation is in the right place. You should also use the intervening period to ensure that you are fully acquainted with the COBS not only as regards the general import of the Rules but also that you know the actual clause numbering of the various Rules that apply. I have a number of UCIS cases where there is a real issue with the FSA claiming the IFA did not know the Rules when clearly he understood what they required him to do although he may not have been able to recite the clause and sub-clause numbering. Preparing for an Investigation isn’t a process that starts the day before, or the week before. It should be undertaken from the very outset of trading – read Jason’s article and learn! - but, in this instance, you have advance notice from the FSA. Know the Rules and how to apply the Rules. But above all, record the fact that you know them and have followed them. Remember, if it’s not on paper, then it didn’t happen.
Posted by: Alasdair Sampson