Even small firms must foster cultures of compliance

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Speaking as member of a 2015 FINRA Annual Conference panel in Washington, DC late last month, Mari Buechner, President/Chief Executive Officer and Chief Compliance Officer of Coordinated Capital talked about how even small firms in the financial services sector must foster a culture of compliance.

Regardless of size, every firm the sector risks exposure if it does not have established and tested regulatory
compliance processes and procedures. Big or small, rich or poor, FINRA is not cutting broker/dealers, registered investment advisors, or Financial Services Advisors any slack.

So, the first priority is to determine whether you’re going to manage your compliance processes and procedures in-house or outsource. Create checklists, backstops, and dual controls — whether you are a single office or a multi-site/multi-state organization.

Second, ensure that every human element has a substitute and a contingency plan that permits your organization to address any variable that pops up. There is software – and cloud-based technology to support exactly these initiatives.

Create top-down compliance cultures

One would think that the driver of every financial services organization’s regulatory compliance march would come from the top. And often it does. But it is particularly important, says Buechner, that leadership come from the top in even the smallest organizations.

“If leadership is going to take shortcuts,” she told FINRA Conference attendees, “your team is going to take shortcuts. And then the reps in the field are going to take shortcuts.” And so on and so forth.

Acting in the dual capacity of CEO and CCO herself, Buechner emphasized the importance of “leading by example and having a compliance culture that’s firm but flexible. There’s a saying,” she added, “that I want you to be happy, but not delighted. So you have to convey the perception that you are not taking shortcuts. Or that you can’t have a very robust and effective compliance system just because you are a small firm.”

Buechner makes a point of visiting every office in her organization — whether small or large. The message conveyed to the teams, she says, is that you are a leadership group that comes out to the field, and that you understand:

  • the industry;
  • each member’s business;
  • how each wants to grow that business in the right way, and then
  • how-to wrap the organization’s compliance structure around that bundle.

For Coordinated Capital, the result is a “we’re in it together” mentality. Everyone understands that when it comes to compliance, the firm recognizes business is key, yet there is sufficient flexibility to consider the practitioner’s approach in the implementation of compliance procedures in the field or the office.

Bottom line: When it comes to FINRA or SEC regulatory compliance, there is no room for error. Don’t be afraid to ask for help. Pick up the phone. Open the lines of communication with a trusted technology partner like us to ensure all your processes and procedures are in place and functioning smoothly.. Ask about our comprehensive regulatory archival and compliance solutions specifically designed for Broker/Dealers, RIAs, and FCMs. Or…you could do it all yourself…

Let’s talk (212- 233-1155).

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