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A common misconception

The lead letter from George Thorpe last week seemed to share what is a common misconception about compliance and it hinted at a reason, perhaps applicable in his own case “if little new business is being introduced”.

Far from being a leech on the underbelly of a fat juicy carcass, the role of the compliance officer is to assist principals of an IFA business to successfully reconcile the needs of customers with the consumer-protective discipline imposed by our regulators. Hence the need for him or her to report regularly “to the board”. He is, after all, merely the servant of those who employ him, whether or not he benefits from outside guidance.

If conducted properly, and supported by consultants who are not too proud to ignore well-intentioned (internal) third-party opinion, compliance can be the most effective marketing tool an IFA has at his fingertips.

Your unkind correspondent can take heart from the fact that as a compliance officer, I am one of those who is being put out of work, this by one of those networks that has recently been endowed with sizeable cash injections for which providers have purchased shares, presumably for long-term investment (certainly I know of no warnings that were attached).

This, I am told, is a sign of confidence in the future and will, supposedly, be used at least in part for the greater development of its systems and services to members.

In this regard, it has been extremely gratifying of late to receive so many wishes of goodwill, leaving me in no doubt that many IFAs appreciate the constructive and creative support which a positive compliance attitude can bring to their business.

A number of past acquaintances are asking me to continue to assist them in the challenging times that lie ahead.

Now, more than ever, IFAs have need of help and advice that can help them strengthen their businesses and consolidate their relationships with their clients.

Rather than seeking to “police” those businesses.

I, like many compliance colleagues, try to offer good, straightforward, add-on value. The same goes for what their clients receive indirectly.

It is a negative way of referring to compliance when a good reason why letter (suitability letter, report or what you will) can be of so much value to a client, to his family and to many people acting on his behalf, either at the time of investment or at some future date if the need should ever arise.

Even fee agreements can very much be “good, bad or indifferent” and every item of documentation should be carefully considered from a “compliance that is marketing11 point of view.

Perhaps it is in this inverted way of looking at back-office services that some networks are beginning to fall down.

I normally charge for my services. If Mr Thorpe would care to contact me through Money Marketing, I would be happy to spend a day with him at no charge.

I feel confident that I can illustrate to him that, as a client-beneficial force, the compliance profession has a lot to offer.

E John Hamp

Corfe Mullen




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