If you had told me when I first started in financial planning that I would one day be working in compliance, I probably would have had laughed at your naiveté.
Looking back, I don’t think I learnt much from any of the compliance audits I endured when I was an adviser. Most of the time I left the meeting(s) frustrated, and seldom more informed or better educated.
To be fair, most of the frustration came from the times when I’d made a mistake that needed to be addressed. I was cranky at myself, but an additional frustration came from the fact that I was no better off from the review. There was no clarity and even less context. Everything was thrown together, and the compliance audit felt like a performance review done by someone that had no idea what I did.
It was often a pointless waste of time and a distraction that I simply couldn’t afford. The auditors were confused, ignorant and arrogant in equal measure. Their conclusions were often unreasonable and individual observations weren’t ordered and prioritised but simplistically given equal weight. The significance of the problems, and their impact on my clients, was lost somewhere in the process.
I understand that advisers are motivated by different things. Some like meeting clients, others finding solutions but, in my experience, most want to feel like they have accomplished something when they return home from work, whether by helping somebody or getting better at their job. I enjoyed providing guidance for my clients as a financial planner and I know I enjoy providing guidance to financial planners as their compliance expert.
Same, but different
While the subject matter is different, the result I am looking for is basically the same. I hope that the advisers I review not only understand their compliance obligations better, but are also in a better position as a result of the review; the experience is designed to improve their knowledge and provide them with the tools and techniques to navigate the complex, the frequently changing, world of financial services.
The transition from financial advice to compliance advice was not all rainbows and sunshine, and I did struggle a little initially. At first, all I really wanted to do was be fair, consistent and make sure my past experiences with my audits were not repeated. Finding balance between competing priorities is always a struggle, and this was no exception. I hoped that if I focused on the aim of the review, my experience would help humanise and improve the exercise.
“I have to admit that I probably didn’t appreciate the depth, nuance and complexity of properly assessing advice quality and conduct. In my defence, I don’t think I’d ever experienced a review that properly assessed my advice and conduct with the Bank. ”
I like to think that I was a good adviser. I always put my client first. I asked questions, I questioned assumptions and I pushed back to those above me when I did not feel right about something. Those core behaviours haven’t changed but others did when I made the transition to change career.
Embracing the Dark Side
The biggest learning curve involved in transitioning from financial advice to compliance advice was improving my understanding of the law itself, and understanding how this was applied in our review process. I needed to learn to focus more on the all-important ‘why’. It’s not enough to identify a failure, it’s critical to understand the reasons why it occurred and what it means in context. I had to learn new ways of seeing advice and different strategies for presenting observations and solutions in a way that would reduce advisers’ objections. I had to embrace curiosity again to keep asking questions and keep searching for better ways to do things.
I still remember the incredulous looks I received from friends and colleagues when I told them I was moving into compliance. You would have thought I had committed treason or betrayed them all on a personal level. I hadn’t embraced the dark side of the Force. I hadn’t declared war on financial planning. I hadn’t become anyone’s enemy. We laugh about it now, but the reality is, this mainly stemmed from their previous experiences with compliance and the Banks’ dull and pointless approach to compliance. It had nothing to do with me personally.
A compliance review doesn’t have to be the negative and drudging experience most advisers endure. Your business doesn’t have to grind to a halt prior to the auditor’s arrival, succumb to paranoia during the review and waste hours trying to understand, and remediate, the ‘problems’ identified by the reviewer.
I’m now working with people who are more passionate about advice, and the value of an advice profession, than many of the managers I have worked under. Although they don’t accept excuses or failures, they’re more forgiving of errors and more tightly focused on improving the quality of advice. I don’t feel like I’ve abandoned my principles, or betrayed my friends. I’m not their enemy but an ally that can help them, help their clients and help them improve as advisers. We feel that a compliance audit is designed to help identify areas for change, focus and improvement, and to also highlight the things you are doing well. Ultimately, we’re committed to helping advisers to provide better advice.
The financial services industry is complex, frequently changing and highly scrutinised. Yes, the law seems prescriptive but it’s more flexible than your Bank’s compliance team might appreciate. Yes, the industry is constantly changing, and you must adapt. Yes, compliance can be bureaucratic and pedantic but it’s important for advisers to maintain sight of the bigger picture. We can build an advice profession. Step outside, summertime’s in bloom.
I understand that advisers resent pointless reviews and clueless compliance reviewers, but, in my view, the experience can be both productive and engaging. So don’t look back in anger or anticipate frustration. If your experience is negative, perhaps you simply need to replace your reliance on basic services with some assured support.