Optimising Compliance in Uncertain Times

Compeer 2017Any opportunity to hear directly from the FCA is one not to be wasted and especially when supported by other speakers discussing the key topics facing Wealth firms at the moment.

I was lucky enough to be asked by Compeer to MC their 2017 Compliance Conference. This afforded me the chance to not only hear from the speakers but to also have some discussions before and after the session.

Rob Taylor, Head of Wealth Management and Private Banking told me about his new role in representing Wealth and Asset Management on a wider scale, post Brexit. His aim is to ensure that the UK can represent and hold ourselves out to be at the top of global professionalism. His session covered this in more detail, outlining how moving in the MiFID II world of compliance and tackling “Accountability 2”, the extension of the SMCR to all other parts of FS, would help achieve this. The trust of clients was a key issue for him, along with the conduct culture within firms. He believes 90% of firms know and recognise this already and said that in most cases the FCA didn’t find it necessary to intervene when they did find breaches, providing the firms concerned had a concerted plan to put in place remediation activity to rectify deficiencies. Rob was pressed on how the regulator was justifying to clients the move away from a register of individuals who were approved but in response Rob said that certified individuals within firms need to be trained, continue with their development and know what behaviours are expected of them and that should be something firms are doing already.

Ian Cornwall, Director of Regulation at the WMA, highlighted a number of issues that as a body they are working on at the moment. There are some hot spots, identifying our LEI, cost of charges being more uniformly communicated, issues for firm reconciling employment law with the necessary internal changes to contracts under SMR, revised funding for FSCS to name but a few.  Ian did highlight the recent focus on ICAAP’s and the fact that at least two s.166 had been issued for failings in this area. This is something for all firms to consider.

Daryl Roxburgh, Global Head of BITA Risk encouraged all wealth firms to response to the WMA’s survey on benchmarking. It’s hoped these can be reshaped from the feedback to provide more choice on benchmarks when using alternative investments or investing for Charities as an example. Compliance Departments were asked to check if their firm was engaging in this debate, for everyone’s benefit.

The Compeer Survey this year was put together by JHC, a systems provider with a solution to provide automation in the monitoring of suitability. The survey of COO’s and senior risk and compliance staff has some interesting findings which included a feeling that the rate and pace of change was increasing. Something Rob addressed in his opening of the conference. The full survey report can be obtained from Compeer and is worth a more extensive read for all in wealth.

Stuart Macdonald Founder of Seric, a firm specialising in information security and data management rounded off the formal speakers focusing on what firms need to do meet the impending deadline of May 2018 for the GDPR – The General Data Protection Regulation, which will be adopted as a standard in the UK at that time. Stuart’s 12 points for consideration in your planning and 5 key issues had delegates furiously scribbling, as many appear to have recognised the issue of reconciling data collection as part of KYC and need to comply with his legislation. Communication to all parts of your business, reasonable behaviour and demonstrable compliance were talking points in the networking after the session!

A couple of delegates after the event commented on the quality of the panel session which rounded off our day. We were joined by Ian Henderson, CEO of Arbuthnot Latham, Marcus Johnson, CEO of NW Brown, Steven Sussmann, CEO of JM Finn and Ian Henderson, CEO of European Wealth. The combined experience of the panel plus MC was something in excess of 150 years, so we all felt we could contribute to the debate by picking up on some of the research and presentations we had seen through the course of the morning. All of the panellists were very candid in their responses to questions from me and the audience. Questions ranged from how they calculate the cost of compliance, what approach they took to managing the expectations of the front office, how they were tackling their MIFID II, SMCR and GDPR projects, how they might explain MiFID II compliance to clients and how to address difficulties in managing their three lines of defence?

I would like to take this opportunity to thank all the speakers and panellists for making the conference such an insightful and worthwhile experience. Also thank you to Compeer for asking me to host the event on their behalf.

Please do contact me with any questions you might have regarding the topics highlighted on the day.

Julia Kirkland

Senior Partner