An Office Demonstrating a Culture of Compliance

As a financial advisor, you know that maintaining federal regulations and client expectations are paramount to the success of your firm. But did you know that creating a culture of compliance is one of the best ways to truly uphold those standards and expectations?

It is! Compliance isn’t a one-time, singular occurrence for any firm, it’s a constant series of choices and actions that you and every member of your team are responsible for each day.

As a rule, every person in your company should understand the value and importance of compliance regulations and work toward fulfilling them in every duty, task, meeting, and habit they have. If your company does this, you’ll create an ecosystem of healthy respect for the regulations and desire to maintain the rules and expectations — in other words, a culture of compliance.

Now that you have a basic understanding of what it is, let’s talk about why you need a culture of compliance in your firm.

Protects Your Clients… and You

Compliance is not meant to be a drag or dirty word — in fact, it was designed to ensure that your clients can feel confident they are being treated fairly and honestly in regards to the money you manage for them. Realistically, those regulations that seem like such a restriction are one of the most important safeguards to protect your clients, and they protect you and your firm at the same time.

If your firm were to mishandle one of your client accounts, either intentionally or due to an organizational lack of oversight, the liability is just the same. Ignorance is still a breach of compliance.

By creating a culture of dedication to the regulations of the industry, you can avoid both instances. You’ll be able to protect your clients by staying up-to-date on changes and trends, ensure that no task gets overlooked and demonstrate your trustworthiness.

Your culture of compliance is a badge of honor that shows the SEC, state regulators and your customers just how dedicated you are to them. And, the lack of that badge demonstrates an equally vivid portrait. In fact, consumer advocates advise clients to be wary of any firm that treats compliance as an unfortunate obligation or burden. They should be as enthusiastic about protecting their clients as they care about themselves.

Keeps You Audit-Ready

Audits happen to every firm. If you haven’t been audited yet, it will happen eventually. It’s just a reality of our industry. But audits don’t have to be traumatic experiences. In fact, with proper preparation, and of course a culture of compliance, you’ll be well-equipped to pass your audit with flying colors.

How? Because instituting an all-encompassing dedication to maintaining the regulations will help prevent compliance tasks, documents, processes, and updates from falling through the cracks and creating a deficiency for your firm.

Not only will some of the burden of compliance be taken off of your shoulders if it is a company-wide initiative, it will also create a solid foundation of compliance upon which to continue building your firm and caring for your clients.

With a constant dedication to compliance, you — and everyone in your company — will be more likely to spot errors and oversights and stay up-to-date on tasks and industry trends, as well as changes in the SEC’s expectations for you. This gives you a better chance of addressing those concerns well before they become a problem for an audit.

Demonstrates Your Trustworthiness

As an RIA, it is your responsibility to demonstrate your honesty, integrity, and trustworthiness along with your business acumen. The best way to build long-lasting, lucrative relationships with your clients is to ensure that they trust you, that they believe in you to make the best decisions for them when it comes to their finances and investments. And the fastest way to show your clients just how worthy you are of their trust is to show them how important maintaining compliance is to you and your company.

Following the requirements of the SEC shows that you are in your clients’ corner, that you are willing to put them first on every occasion. And when they see your culture of compliance, they will be confident that you aren’t just saying the words, but really walking the talk.

Most people are skeptical creatures, especially when it comes to financial matters. Demonstrating your dedication to putting them first is the best way to show that you are worthy of being responsible for their hard-earned money.

Helps Your Team Stay Up-To-Date on Regulations

RIA compliance regulations change often — the focus of state regulators and the SEC change every year, at minimum — and it’s vital that you don’t get caught unaware by those changes. That’s just a recipe for a bad audit.

One of the best ways you can prevent such an error is to incorporate a comprehensive RIA management platform, like SmartRIA. Combined with your company’s focus on compliance, a robust platform like ours can automatically monitor which tasks you’ve already met, which are upcoming or missing, check for lacking documents, announce new updates in processes, and review your procedures.

While a compliance software can help your firm remain compliant and raise efficiency throughout your company, it can’t replace the value that comes from instituting an office culture dedicated to remaining compliant.

Create Your Culture of Compliance

The best compliance strategy you can incorporate is to remain proactive instead of reactive. Cultivating internal compliance procedures and habits, not just for you but for the entire company, helps reduce human error and oversight and keep you worthy of the faith your clients have put in you.

But the most important thing to remember is that in order to create a culture of compliance you must start with yourself. Stop viewing compliance as a restriction and begin appreciating the value and protection it offers yourself and your clients. Then begin expecting the same attitude from your employees. Realistically, a culture of compliance should become as ingrained as punctuality.

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