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Why Even The Pros Need A Pro

All the justification you need to spend money on an outside consultant to review your compliance program.

I’ve been guilty of it.

You spend your career building a reputation, a knowledge base, and a brand in your respective field and people come to you as an “expert” in the space. You can’t possibly need help, because you’re supposed to be the pro! Moreover, when you’re the CCO or compliance officer of a firm that barely wants to pay you for your input and services, it’s hard to fathom asking for an outside opinion.

Even the pros need a pro though.

One of the things I enjoyed the most about being a compliance consultant rather than an in-house compliance officer was the ability to parachute into all manner of investment shops and being exposed to different financial products, structures, and operations. Compliance permeates every facet of a company and getting exposure to a variety of businesses not only kept the work interesting, but it allowed me to get a better feel for “best business practices” across a spectrum of firms rather than just one. I then took that knowledge into every firm I consulted to give them an idea of what their peers were doing and also where the market was trending. Could you accomplish this in-house? Maybe, but what you share with your peer group at the local roundtable or email chain is not always as comprehensive as what your third-party consultant might see from their experiences at everything from the small one man shop to the large, globally renown firms they advise.

"You drafted it. You're executing it. You're reviewing it. Somewhere in there, you're going to miss a red flag..."

In addition, I believe the biggest value add to bringing in an outside party for advice is actually the second set of eyes on your compliance program. Have you ever proofread a paper and despite your best efforts when you’re finally ready to give it to someone else to proof, they still find the missing commas, periods, or the dreaded spelling mistake? It happens because we are too close to the subject matter and the same applies to in-house compliance being too close to their policies and procedures. You drafted it. You’re executing it. You’re reviewing it. Somewhere in there, you’re going to miss a red flag, an amendment to a policy, or the subtle actions of a rogue employee in the firm – and it’s completely understandable. There was a time in late 2015 where the SEC even considered mandating third party reviews of investment advisers to help combat this very problem.

"It should be used as a learning opportunity and a chance to audit your hard work to find the room for improvement or have the seal of approval from a fellow expert in the space."

Hiring an outside consultant doesn’t minimize your value to your company. It should be used as a learning opportunity and a chance to audit your hard work to find the room for improvement or have the seal of approval from a fellow expert in the space. And for those budget conscious firms, the best way to accomplish this is to have the third party come in and audit the compliance program as part of your mandated annual compliance program review.


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