Balancing Evolving Client Expectations with Increasing Regulatory Scrutiny
Monitoring and deciphering external regulatory shifts is already a constant source of stress for compliance teams. As the SEC rolls out stricter oversight and tougher fines for firms falling short in key compliance areas, heading up compliance for an advisory firm just got a little more difficult. Firms will have to prioritize budgets around a more proactive compliance plan or risk burning out compliance staff and potentially facing hefty fines down the line.
As if managing and monitoring internal compliance wasn’t hard enough, the SEC’s latest crackdown on non-compliant messaging apps like Whatsapp and traditional cell phone texting has sparked panic among some of the wealth industry’s largest firms. Shelling out a few hundred thousand for violations, while obviously unpleasant for bigger firms, may not even be feasible for smaller advisory firms.
Let’s consider why, even with this added risk, many firms are still struggling to resolve existing gaps around non-compliant client communications.
Operating in a relatively complex industry, financial advisors are continuously evolving their services to exceed client expectations while meeting regulatory requirements. Because today’s consumer has access to more social messaging platforms than any prior generation, advisors feel a constant weight to meet ever-growing accessibility demands. This mounting pressure has created an environment wherein even the most compliant firms have found themselves under the SEC’s magnifying glass for communicating with clients in messaging apps wherein the conversation was not properly captured.
Having near-instant access to clients via in-app messaging is not a passing trend; it’s an evolution of client preferences. Given this, advisors will need to meet changing expectations through progressive technology that satisfies both clients and the SEC – while ideally folding into existing technology platforms.
Advancements in client-facing advisory platforms remain critical to the industry’s relevance at large. Recognizing its importance, advisory firms have been spending more and more on technology each year. The average firm was spending around 9% of revenue on compliance nearly seven years ago, with a now estimated 10% increase on that figure year over year. Given the increasing scrutiny from regulatory agencies, doubling down on compliance resources, especially fintech solutions, is a smart move.
Proactively investing in technology can ease future financial burdens such as fines, compliance audits and consultant fees. When bundled within an existing tech platform, employees are able to swiftly adopt the technology while simultaneously meeting clients where they are already comfortable.
In the search for solutions, take a close look at Valian – a client experience application offered within the innovative, lightning-fast Pulse portfolio management platform by AssetBook. Pulse offers exactly what advisors need in a compliance-friendly application. Rather than hire additional compliance staff or spend revenue building out a custom tech solution, advisors can offer clients a seamless and functional way to monitor finances and stay in close communication.
Vetting and rolling out technology can be a time-consuming challenge. Embracing an already powerful solution within a leading advisor portfolio management platform may be the easiest thing advisors do next year for their firm.
Book a demo today and see how AssetBook can partner with your firm’s compliance team.