You need only open the business section of any paper to read about another firm closing its doors or paying a large penalty due to compliance violations. When speaking with RIAs, I often ask about something in their Code of Ethics or Policies & Procedures manual. Not infrequently, I am told they either don’t have documents like these or if they do have them, they aren’t sure what is in them. If they do know these documents exist, they ‘hope’ their employees are following them. ‘Hope’ is not a strategy in dealing with a very serious business risk.Compliance with regulations may not make you your first million, but it can easily take away your last penny. In many cases, you may have paid a substantial amount to have these documents drafted. To be successful and compliant, the easiest way is to live these principals each day and your employees will follow. If you first take a look at these documents when you have an SEC examiner meeting scheduled, chances are you are not living these principals. Here are some tips to integrate your compliance program into your daily work life:
- Fit compliance into your business plan and not the other way around. Often compliance is separate from the core management of the firm and not taken into account when planning for growth. Here is an illustration of this point. If growth plans include new employees, they need to learn about the values and operations of the firm to successfully do their work. Take the time to teach them about your values and procedures from the outset to avoid problems down the road. For example, a well executed disaster recovery policy can save time and money in the event of an emergency. Make sure all employees are away of what to do in the event of an emergency including who to call, where to physically assemble, how to continue trading and when to reach out to clients.Read More
