Financial advisors should integrate compliance activities, and possibly compliance software, into their entire practice, says the Financial Planning Association in the recent Compliance Edition of the FPA-ActiFi 2010 Adviser Technology Reports.
"We suggest advisors think holistically about compliance and not regard it as something that gets bolted on to the rest of your practice," the report says. "To that end we suggest you look ... for opportunities for integrated solutions and solving the compliance needs and other practice needs with the same tools, processes and people."
The FPA report says firm owners should ask themselves some basic, but useful questions such as whether there are gaps in their compliance, how they can incorporate compliance with other activities, and do their systems enable them to respond to an audit or other compliance situation.
The recommendations came from an FPA study of how many advisors use compliance software and how many are satisfied with the results. The survey of 338 advisors shows how they use software for different compliance activities. Tops on the list was the use of software to develop policy compliance manuals (62.2 %).
Less than half said they use it for maintaining documentation that materials have been checked for compliance (48.8%) or for maintaining documentation that necessary disclosure forms were received by clients (47.6%).
Of the advisors who use software for compliance, almost all say they are satisfied with the results. Only 3.7% say they are somewhat dissatisfied. The study shows the more activities the advisor uses the compliance software for, the more likely they'll be satisfied with the experience.
The FPA says it conducted the survey to help firm owners make decisions about the most efficient ways to meet compliance obligations.