Selling Compliance: The critical role of Compliance Managers


It's difficult for most people to appreciate the role the Compliance Manager plays in most financial services companies.

The challenge of 'compliance'

Clients (particularly aggrieved clients) often see the Compliance Manager as the person who spectacularly failed to deliver their returns, manage market volatility, prevent product failures or ensure that every financial service delivered by the Licensee and its Representatives exceeded market leading standards.

The Compliance Manager: Apologist, Arsonist or Fire-fighter?

The Compliance Manager: Apologist, Arsonist or Fire-fighter?

Advisers, on the other hand, often oscillate between seeing the Compliance Manager as a useful resource (when they're in a bind) or, more frequently, as an inconvenience and impediment to their productivity.

In my experience, Relationship Managers tend to mimic that view (although their seething acquiescence is often concealed behind french cuffs and practiced bonhomie). When they don't dismiss their compliance people as "useless" or as "being a waste of space" they often condemn them for being ultra conservative and heavy handed.

[Curious about these points. Please read "Five reasons compliance is meh" or "You're right. Compliance is the problem".]


I am aware of one executive who, immediately prior to her advice business encountering regulatory difficulties, allegedly screamed at Compliance staff for "getting in the way of business".

The perception of 'compliance managers'.

If you are looking for a dynamic representation of most advisers' view of Compliance, then this video is pretty close to the mark. 

To be fair, not all advisers see things this way.

Some advisers see the Compliance Manager as a valuable ally and an advice expert who they consult on a wide range of matters. I've had the joy of working with many advisers of this stripe and I remain in contact with them. Likewise, those Relationship Managers who recognise that their success is better based on sustainable and predictable results tend to engage in a collaborative and constructive manner with a clear focus on maintaining effective relationships. 

If you speak to Compliance Managers - who are, as a general rule, conscientious, competent and highly ethical professionals - they'll commonly talk about the practical challenges to their role; the difficulty of securing engagement, the lack of resources and support, the absence of regulatory certainty, the looming threat of an unpredictable and disengaged regulator and the largely impenetrable business for whom they are responsible. Most also understand the unspoken term of their employment, that "come the (regulatory) revolution" they'll be first against the wall (and perhaps the only one so treated as their peers and leaders take up arms against them). 

Compliance is challenging

The Compliance Manager's job certainly a challenging one; particularly if they do their job well.

Click here to read more about how effective Compliance Managers can be treated by their employers. 

Still not sure you understand the challenges of the role?

Well, the following video is a great metaphor for the role of the Compliance Manager. 

It's not entirely representative because the Compliance Manager has the added challenges of someone telling him what plates to spin and when and, in all likelihood, there are plates being spun off stage of which he's not aware.

The role is both satisfying and undoubtedly challenging. In addition to dealing with what one former Regulator describes as ASIC's "dark arts" (which he refers to as their unpredictable willingness to selectively apply, and ambitiously stretch, the law and ASIC policy) Compliance Managers are often burdened with governance requirements that restrict from correcting, or even addressing, the Regulator's errors.


Click here to read how internal governance requirements and confidentiality agreements can affect openness and transparency.

Compliance as a strategic management discipline

The stark reality within most financial services licensees is that Compliance Managers are frequently disenfranchised from management decisions, often excluded from strategy development and generally isolated from the business. 

In fact, in most organisations, the Compliance Manager is an under-utilised technical resource with some influence but precious little authority.

A bleak assessment? Perhaps, but how many AFSLs can you name that are led by (former) Compliance Managers?

This is a shame because recognising compliance as a strategic discipline and embedding compliance, governance and risk management at the executive board delivers significant advantages to the businesses that do so; including in terms of recruitment, retention, innovation and the ability to pivot far more successfully than their competitors.

Can this paradigm be shifted? If so, then how?

The shift will not occur externally. Despite an Australian Standard that establishes that the CEO is responsible for compliance, the brutal reality is that compliance successes (generally "near misses" or competitor failures) have "many fathers", while compliance failures most often end with the Compliance Manager left holding the baby, a confidentiality agreement and a cardboard box.

However, the shift to a more resilient and productive business model can occur internally through the advocacy of forward thinking CEOs and sales-focussed Compliance Managers.

Authority and persuasion

To some, the idea of a sales-focussed Compliance Manager is anathema, but it shouldn't be. Compliance is not an antonym for Sales any more than Sales is a synonym for Graft. Sales is about influence, persuasion and authority. In my view, an effective Compliance Manager should cultivate this critical capability and focus as much on relationships as on technical details. Even those Compliance Managers who think they "suck at sales" should appreciate that the science can be learnt and the skills developed and improved.

I also believe that Compliance is, and should be recognised as, a strategic management discipline, but I fear it will not transcend its limited functional role unless Compliance Managers learn to sell the value of their role and their vision for the business well enough to secure the active engagement of advisers and line management. Providing reassurance often wins formal engagement from advisers and line management, but sustainability, continuous improvement and resilience must be built on a more substantive foundation. 

Impact and Invisibility

The fundamental difficulty is that most Compliance Managers are Invisibles; technical experts more interested in being left alone to do their job well than promoting themselves or demanding recognition.  One Compliance Manager recently confirmed this diagnosis by confessing that she's "hopeless at sales anyway"; unfortunately, as Tony Vidler recently argued, all roles are sales roles

Click here to read the HBR article "Managing the 'Invisibles'" by David Zweig.

Unfortunately, it's not enough for Compliance Managers to simply experience this epiphany about their role. They also need to appreciate the importance of selling their value and actively proselytize within their business and more broadly. They also need to appreciate that converting sceptical colleagues to appreciate their role will require an ongoing commitment. And it's not only the "sales guys" that may be dubious; a CEO recently (unhesitatingly) volunteered to me that, in his view, "compliance is boring".

Compliance may very well be the red-headed step-child of a vertically integrated business, but its productive and transformative potential is largely untapped.

Finding our path

The challenge for most Compliance Managers is to sail between the Scylla of obstructionism and the Charybidis of complicity and strike out in a new direction that maximises the inherent value of the role.

Perhaps the real challenge may be convincing anyone else to sail with you. 

Formal engagement between Compliance and the Business is par for the course, particularly in the face of uncertainty and frequent change, but embedded, unconscious and willing engagement is harder to secure and maintain (but we'll deal with strategies for doing so in a subsequent post).

All things considered, Compliance is a critical, exciting and valuable function for Financial Services Licensees; but it's a poorly appreciated one.

Instead of simply accepting the status quo, Compliance Managers need to respond strategically and actively sell their inherent value and ongoing contribution. 


Is this assessment too bleak or a fair reflection of your experience? What strategies have you put in place to sell your role and achievements. Did they work? Share your views.

(c) 2014 Sean Graham. Assured Support Pty Ltd.