When you have a great new idea, who do you tell first? Your partner? Your marketing assistant?
Not so fast. Your first call should be to your compliance department, says Sandra Kegie, executive director with the Association of Canadian Compliance Professionals and president of Kegie Consulting Corp. in Toronto.
Don’t be worried that your idea will be rejected. In fact, Kegie says, your compliance rep is more likely to brainstorm with you about the ways you can develop your ideas in a compliant fashion.
And you may even be surprised at how your rep can help you with your day-to-day tasks. Here are four examples of instances in which you should be proactive in talking to compliance:
1. You’re making a change to your practice
You might think changing your compensation structure or adding a new product line requires only marketing materials for your clients. Your compliance official may inform you otherwise.
Your licence might restrict your ability to make such a change.
“[Financial advisors] hold a registration, which is a privilege,” says Kegie. “They have to be mindful of what they can or cannot do with that registration.”
By approaching your compliance department first, you can avoid jeopardizing that license.
2. Your community group is full of prospects
You are an active volunteer for local events and boards, which has led to relationships with community members who respect you. This seems to be a great pool of prospects.
However, Kegie warns, you must be careful when looking for potential clients through your community involvement, especially if you hold a position of authority in that community organization.
She uses the real-life example of an advisor who was also a part-time clergyman and therefore knew hundreds of people in his community. The Ontario Securities Commission deemed people in his ministry “restricted clients.” That meant the advisor could not have his parishioners as clients because of his position of authority.
By talking to a compliance rep, you will know what you can and cannot do before your regulator is knocking on your door.
3. You’re holding an event for prospects
In order to ensure the event your are planning is compliant, describe the full event to your compliance rep.
Where and when are you holding it? What refreshments are you serving? How long will it run? How much will it cost?
These details will help your compliance rep determine whether the event is a reasonable way to attract potential clients.
“You don’t want to set up something where [prospects] feel obligated,” Kegie says, “where they feel the event has been so extravagant that they have no alternative but to invest with you.”
So, whisking prospects away to a costly resort may not fly with your compliance department — and you should know this before making any expensive arrangements.
4. Any time you have a question
The oft-quoted adage “There is no such thing as a stupid question” is popular because it’s true. While you may feel self-conscious about asking a question you feel you should know the answer to, many of your peers probably are wondering the same thing.
“Compliance doesn’t expect [advisors] to be on top of everything that’s going on in regulation,” says Kegie. “It’s not a matter of looking foolish. Compliance loves these questions because they see it as their advisors wanting to learn.”