[The Institute for Innovation Development with this post will begin a regular review series on books we uncover of great practical value on the topics of business innovation and adjacent areas of importance, such as, this review in the area of regulatory compliance in financial services. Many in financial services complain that the high level of regulation stifles experimentation and innovation, but that is not true when you look at the jaw-dropping stream of innovations coming from other highly regulated industries like health care. The key is to fully understand the regulatory environment you operate in and learn to strategically work within that environment. That is why this book on the topic provides an excellent resource for all financial services professionals.]
“The greater likelihood of regulatory enforcement action looms as an existential threat to advisors, money managers and broker-dealers.” — The Compliance Advantage, page 2
Despite the current Trump administration’s promise to rollback legislation in general, author Todd Cipperman, CEO of Cipperman Compliance Services, warns that “firms must prepare for the advancing army of examiners and their enforcement cousins.” He cites in his book, The Compliance Advantage, the increasing activity of state regulators and SEC Chairman Clayton’s commitment of 50% of their budget to increase examinations and enforcement to a record level - with an emphasis on personal liability. He also maps out the most significant compliance trends and offers practical insights and a definitive plan on how to protect your business.
Big Idea – Reading Regulatory Tea Leaves
“Unfortunately, no treatise can tell you all you need to know about compliance programs and no degree program can train somebody to become a qualified chief compliance officer.” — The Compliance Advantage, page x
The best defense suggested by Mr. Cipperman is in making sense of all the regulatory data being issued by carefully shifting through the growing mountain of information to spot driving trends. This way a business owner can focus their limited time, money and effort on the actions that matter most. Years of regulatory and court precedent in the form of public statements, alerts, examination findings and enforcement cases provides you with a useful roadmap on how best to develop a regulatory compliance program for your firm.
Insight 1—The 10 must-know trends to protect your firm
“I believe that if you understand and address these ten trends, you will materially decrease your regulatory risk.” — The Compliance Advantage, page xii
Mr. Cipperman identifies 10 critical trends that investment management executives and compliance professionals must know to protect their franchises. Each chapter of the book maps out and details each trend in a casebook format offering a proposition or statement then using redacted blog posts to illustrate, describe and prescribe a specific course of action including five action items suggested to address each trend:
1. The SEC is examining more advisers and bringing more enforcement actions.