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Compliance tip of the week: Draw up your own client agreements

Draft your own procedures and client agreements. This may save your business and help you make a lot more money. 

Procedures and client agreements are an excellent opportunity to define what your business does and how it delivers it. While they can be taken off a peg in the form of a network offering, this prevents you putting them together with your business in mind.

A good set of procedures works with the grain of the business. It begins by describing what the firm does and which individuals perform which roles. It then moulds rules around those activities to ensure they are done in a way that the regulator would find compliant. A personalised client agreement does much the same. It may be addressed to your customers but it also tells your people what they are promising to do. To achieve all this, however, you have to find out how everyone works and set the limits on the variations from the norm that are acceptable.

This process enables you to identify rogue individuals. They will be the advisers who do not accept your procedures, not by providing legitimate arguments about them but by simply ignoring them or, worse, denigrating them in front of others in the firm. 

Challenge these people and if they do not contribute constructively, lose them. 

A sure way of spotting a firm heading for trouble is where advisers do not respect the procedures, client agreements and compliance function.   

Adam Samuel is an independent compliance consultant



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