RegulationOct 16 2013

When it’s time to take control

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ByNeil Herbert

■ They must be clear on what good looks like. Set the standards and then drill those standards down through the business – through policy and process, training and development and the general development of cultural attitudes.

■ These standards should be embedded through effective performance management, with clear expectations, objectives and competencies for every adviser – in every area of their work.

■ Assessment is the critical next step. The often weary annual appraisal is just not enough. Ongoing assessment of key indicators in all areas of delivery is what is required. This means daily, weekly or monthly assessments against key performance indicators, with clear benchmarks. Where shortfalls occur – whether they are concerned with falling behind with CPD or not completing transaction suitability forms – these must be identified immediately and dealt with.

There are a number of ways to benchmark these deliveries and spot shortfalls. These include:

■ Failure to meet numeric targets or benchmarks, for example, financial targets, exceptions to suitability or other process completion and adherence.

■ Failure to complete certain tasks by due dates, which can be anything such as signing off on code of conduct/APER guidelines, fit and proper, and so on.

■ Failure to successfully complete and pass, CPD, e-learning or online knowledge tests.

■ Finally, rewards must be linked to overall performance against all benchmarks, with strong weighting toward compliant behaviours and conduct.

Only then can a firm feel that it is truly managing outputs as well as inputs. All of this represents a considerable investment in time and costs. For many it will require a sizeable shift in attitudes and culture. The change will need to be driven from and supported by the senior management of the firm and delivered through the joint efforts of human resources, compliance and supervisors. Only when advisers understand that there is a determination and commitment to drive this through – that there is no hiding from a process of ongoing assessment and that conduct and compliant behaviours are as important as financial performance – will they themselves buy into the process.


Getting the biggest return from their investment must be the goal of all firms who want to rise to the compliance challenge. In particular, effective technology and process–based decisions and investments will be key. The most effective technology solutions will be those that manage the inputs as well as managing the outputs.

For example, there are many systems that log CPD. Many firms have chosen to let staff log directly with the relevant accredited body, with oversight by one ‘super user’. This is probably the easiest and most direct way to ensure that the main box – the issuance of