How can you manage compliance more effectively in wealth management?

Wealth management advisors are investment management experts, not compliance administrators – and it needs to remain that way.

Apart from distracting advisors from the business-critical jobs of client service and AuM growth, manual compliance processes have become untenable due to the volume and complexity of monumental regulations, such as MiFID II and GDPR.

Whether the requirement is to record all activity that culminates in advice, across all channels, or to capture and retain data appropriately to ensure data privacy, it is unreasonable and risky to hold relationship managers accountable for your firm’s compliance status.

The vast array of compliance processes that must be completed according to a regulator prescribed schedule are increasingly difficult to execute properly and on time. Failure to track effectively and hit deadlines exposes your firm to compliance risk.

Digitisation: no longer optional

Even at Board level, a digital approach to regulatory compliance is now considered non-negotiable. By automating compliance tasks, both advisors and compliance teams can be sure they are taking the right measures and following the right processes, at the right time. 

For example, when conversations with prospective clients are automatically recorded, transcribed and analysed during the initial engagement phase, an indisputable and authoritative record is created and compliance is assured. Compliance risk and process flaws are quickly detected and your compliance team can redeploy intellectual capital to focus on client service, not compliance administration.

During onboarding, progress can be tracked in a single view by all stakeholders including the relationship manager, onboarding consultant and compliance officer. Everyone has sight of all data provided. They can identify bottlenecks, determine what remains to be done and decide what must happen next to move the onboarding process along. They can see which compliance checks are outstanding and when the next review cycle is required.

“By providing all stakeholders with business-wide oversight of real-time compliance data, in one view via a graphical dashboard that is relevant to their role, they are assured that the firm is acting appropriately”

By providing all stakeholders with business-wide oversight of real-time compliance data, in one view via a graphical dashboard that is relevant to their role, they are assured that the firm is acting appropriately and can speak more confidently with regulators when exams or investigations arise.

Compliance is not the sole beneficiary

As regulation spiralled following the financial crisis, and digitisation of compliance processes became more commonplace, the primary focus was on meeting regulatory requirements. Today, the incremental benefits that compliance automation can deliver are more widely recognised, because wealth managers are now leveraging data captured for compliance for other purposes.

For example:

  • Key KYC data including attitude to risk, demographics and preferences, can be digitally analysed to identify other products and services that may be relevant to the client, thereby creating opportunities for AuM growth and increased share of wallet.
  • Recordings of interactions can be used to breed best practice and improve prospect management in the future. High performing individuals and teams can be showcased as best practice examples, and those who are performing sub-optimally can receive additional training.
  • You can demonstrate to clients that their data is secure, safeguarded by compliance retention and disposition rules designed to ensure you are operating in their best interests.

Any wealth management firm failing to embrace digitisation and process automation is in grave danger of dropping the compliance ball. However, for those who have successfully automated compliance processes and are leveraging compliance data throughout the client lifecycle, not only are clients’ best interests being safeguarded, but they are equipping their relationship managers to improve service and performance over time.

This article is an extract from our e-book 6 ways wealth managers can convert interactions into trusted client relationships. Download the full e-book via the button below.


Wealth Dynamix delivers Client Lifecycle Management solutions to the world’s leading private banks and wealth and asset management firms.


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