Many see compliance as a necessary evil to appease regulators and meet standards set forth by the law. It is no doubt an annoyance to those whose sole focus is to do their job quickly instead of carefully. Compliance takes time, and time is money. It is also not a direct revenue generator, so many CEOs are hesitant to go all-in on what looks and feels like a negative force for their business.
While this thought process is understandable, it is also shortsighted. Sure, having a compliance officer run through your business like a fine-toothed comb is sure to decrease flexibility and customization to some degree; however, what is gained from an investment in compliance is more than worth that sacrifice.
As this blog post will explain, proper compliance provides checks and balances and a sense of security for both employees and clients that is necessary for any business to move forward with confidence. When those who depend on your business know that you are doing everything to stay at the forefront of regulations, laws, and best practices, businesses often see their commitments pay off in higher morale and a retention of clients who would otherwise leave if legal issues struck.
Making Compliance Work
Hiring a compliance officer is not enough to effectively protect your company. Compliance is only as effective as its implementation. Like any relationship, trust is paramount–namely, the trust between management and compliance. That trust is forged with the realization that compliance is employed to help, not hinder business.
Everyone on the team must be held accountable for employing and respecting the compliance process. There cannot be exceptions, even for the CEO. This displays, from the top-down, that this process matters. The entire team is responsible for remaining transparent and allowing the compliance officer to do his or her job and feel welcome to join meetings and make inquiries whenever he or she feels it is necessary to do so. Whenever leadership embraces compliance, the organization feels empowered to follow suit.
The Dangers of an Inadequate Compliance Process
Frankly stated, businesses that lack compliance in the investment consulting industry put their clients and employees at greater risk. This could increase the probability of employee turnover, client terminations and business failure. As fiduciaries, our business hinges on our clients’ trust. The moment this trust comes into question is the moment that it is broken–often irreparably so. A strong commitment to compliance creates a culture within a firm of trust and confidence which is then passed along to client relationships. This forms the foundation of lasting partnerships both internally and externally.
Inadequate compliance can lead to business and service shortcuts which erode trust and confidence that ultimately lead to lawsuits, which can quickly cause clients and future clients to think twice before trusting you with their assets. This distrust has a trickle-down effect, causing decreased business, plummeting morale within the company and an eventual implosion due to distrust both inside and outside the firm. If a fiduciary is forced to defend its standards in the court of public opinion, the damage is often already done.
Understanding the powerful assurance that properly implemented compliance can provide, AndCo Consulting has committed to making compliance a priority by hiring Matt DeConcini as chief compliance officer. Matt has over 20 years of legal and compliance experience working with and on behalf of institutional clients and their participants and beneficiaries.
With $72 billion in retirement fund assets, we take our fiduciary responsibilities extremely seriously. In our quest to be a transformational leader in the investment consulting industry, we found that proper compliance should no longer be seen as anything but mandatory. We are setting the standard today, by allowing Matt to own his position with the full support of the entire AndCo team.
Peace of mind cannot be bought, but our clients and team can rest easy knowing that we are monitoring business practices, policies and procedures through a comprehensive and integrated compliance program. As we know from experience, a cross-organizational approach to compliance also allows us to deliver organization-wide consistency, sustainability and transparency.
But this is just the beginning for AndCo. We are listening to our team, our clients and the industry as a whole to find opportunities for innovation every single day. Our dedication is not only to making our own firm successful, but shaping the industry for years to come.