As we inch closer towards 15th March 2021 and those who have obtained their transitional licenses and have made the changes ( or almost there ) it feels like successfully meeting a deadline. However, when you take a pause and realise that it is the start of the new regime that brings the financial advice industry into the new era and dare we say levels the playing field between previously known RFA’s and AFA’s. While the requirements may seem daunting at this stage, however, the thought at the centre of this change is valid which is keeping the customer best interest at the centre of everything that you do as an adviser or a FAP.

We understand the big focus will shift towards obtaining a full licence you will take a bigger sigh of relief after getting your full licence before realising that this is the new norm now, I need to maintain these standards and provide evidence for the policies and procedures license has been granted to me. However, if we shift the terminology and approach this from a point of view by stating “What do we need to do to operate as a successful and compliant ( FAP/Adviser/AB) under this new regime” then obtaining the licence becomes part of the journey rather than a goal post.

For that reason, we believe Compliance and Risk Management should be part of your organisational DNA and strategy. Whilst this is a nice thought in principle, the delivery may not be as simple, given below are the questions that each FAP should be asking itself

  • Who plays the role of the compliance officer, Director, Principal, Office manager and if they do what happens to their existing responsibilities and what is an opportunity cost if an adviser has to play this role
  • Do you have the expertise in this area, being crucial to your survival and regulatory obligation can you really do justice to the role
  • How much time is required upskilling internal staff members, directors, to play this role and how much time is needed to stay up to date with the regulatory changes
  • How do you define good performance and how do you measure people against the established benchmarks
  • Can the business afford to have this resource inhouse and have another staff on the payroll which is not directly contributing to revenue, a concept alien to some of the smaller firms
  • Do you have the experience of managing people, deal with employment relations, staff retention and if there is only one person managing this area what happens if they leave
  • Where do you go to seek advice should anything goes wrong, and what is the cost of that advice
  • Are you going to invest in any technology solution that makes this process easier, rather than all your information sitting in a spreadsheet and documents?

There may not be a straightforward answer to these questions and a lot of businesses may not have the answer at all. To solve this for a lot of FAP firms in the marketplace we have created our CaaS ( Compliance as a Service ) offering that delivers compliance as a managed service for businesses who do not have internal compliance resources and need the expertise of experts in the field to have the confidence in their policies, procedure and controls when dealing with clients, regulators, aggregators and product providers. This solution is delivered at a fixed monthly cost, where we not only provide you with basics such as file reviews and ongoing assessments based on the regulatory standard and internal policies. Our FAP compliance experts work with your team to assess your current processes and tools, providing guidance on a plan to achieve optimal capability. They keep you up to date on changes to multiple complex regulations and help demonstrate your compliance to regulators with a structured and sustainable approach to compliance management.

Published On: January 6th, 2021 / Categories: Compliance as a Service, FAP Compliance /

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