Who should be responsible for compliance in your firm?

Feb 9th '18

An interesting article this week, which posed a good question: Who is responsible for compliance?


While the article focuses on how responsibility should be divided between a regulated firm and an outsourced provider, it begs a wider question – how is compliance responsibility divided up within your organisation?


  • In-house or outsourced?

As the Linkedin article says, ‘organisations cannot simply absolve their responsibilities by outsourcing risks and obligations’.


And more than that, if there are failings with an outsourced compliance service provider, it’s typically the client rather than the provider that faces the penalty, financial or otherwise.


If you do choose to go down an outsourced route, you need to make sure you’re complying with FCA rules.


  • Is compliance the job of the Compliance team?

Well yes, of course. It goes without saying that your team is ultimately accountable for your firm meeting its regulatory requirements. Your CF 10, as the FCA terminology has it, has responsibility for your firm’s adherence to the Authority’s rules.


But there are definitely areas which would benefit from other areas of the firm being involved.


When it comes to financial promotions, for instance, the Marketing team plays an essential role in getting approved content to market.


  • What is Marketing’s role in the Compliance process?

Your financial promotions are your shop window – and therefore one of the areas where any regulatory breaches are most visible.


If your adverts, brochures, presentations, social media posts or website (or any other promotions) fail to meet the regulator’s standards, it will be obvious to many of your clients as well as to the FCA themselves.


And the Marketing team has a big role to play here. Just as writing successful content isn’t just the responsibility of the Marketing team, compliance in other areas is also often a joint effort.


If your marketers have a good understanding of the rules, your role in reviewing and making edits to financial promotions becomes far easier. And Compliance teams can help themselves here, by educating your Marketing team in what constitutes a financial promotion, and what this means in terms of regulatory requirements.


If they appreciate the obligations around disclaimersprominence and suitability, they are more likely to write content you can approve first time – reducing your workload and getting promotions to market quicker.


  • Does your Sales team play a part?

In the same vein, there is much you can do to help your Sales team improve compliance. Whether it’s putting in place resources like online slide libraries, to ensure they can access current and accurate data, or helping them to make sure their sales presentations and proposals are compliant, you can work with your business developers to ensure they are your allies in compliance.


  • Leading from the top

While your team may ultimately be accountable for your firm’s ability to comply with regulatory requirements, you need senior leadership support if you want to achieve a true ‘compliance culture’.


Good conduct needs to be the expectation at all levels of your firm.


Your board and senior management need to be fully behind any drive to improve good governance – unethical behaviours cannot be tolerated. A lead from the top is essential if you want to embed a true culture of compliance in your firm.


  • Making life easier for everyone

Once you have the rest of the business on board, and they understand their vital roles in the compliance process, how can you make it easier for them to achieve their aims?


Automating aspects of the approval process can help. As well as mandating Compliance approval – and making it harder for regulatory breaches to slip through the net – automation can reduce admin and duplication, minimise the edits needed via simultaneous online reviews, and therefore speed up the entire approval process.


Automation could make your approval process better – quicker, easier, more robust.


So there we have it – while the Compliance team (and your board) will be ultimately accountable for any regulatory slip-ups, meeting the FCA’s requirements should be a team effort, involving all levels from the top of your firm down.


Get your business on board; educate them to become compliance champions, and put in place the processes and technologies needed to make it simple.


How can we help!

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