Managed accounts may be just “one lever of many” that advisers can use to increase scalability in their practice, but the advantages they offer to both clients and advisers make them a crucial consideration.
Compliance staff have been in high demand for a few years now, but the rise of industry super funds and the private capital sector has created even more demand for talent, both at the top and bottom end of the experience spectrum.
Compliance is ‘hollow, empty’ without the right culture: ASIC’s Longo
ASIC commissioner Joe Longo has made an impassioned plea for companies in the financial ecosystem to build their compliance framework around “integrity, trust and ethics” rather than simply “legal compliance with the rules”.
Addressing the Australian Compliance Institute’s Annual Conference this week, the typically reserved Longo began by quoting Bertrand Russell, who said we have “two kinds of morality, side by side: one which we preach, but do not practice, and another which we practice, but seldom preach”.
The job of compliance professionals across the country, including financial advice paraplanners, is to prove Russell wrong “every day”, Longo said. “Because, when not taken seriously, compliance can devolve into mere lip service, where what is practiced isn’t preached and what is preached not practiced.”
For true compliance to be achieved, he continued, the professionals responsible for holding others to account can’t simply rely on adherence to a set of rules and laws. A culture of compliance means alignment between what is preached and what is practiced, but cultural pillars need to be in place for that to happen.
In this industry “more than most”, he said, alignment is crucial if trust is to be developed between providers and consumers or investors. “And without that trust as a foundation, the tower of business comes toppling down,” Longo said. “That’s why, as I’ve said before, a profitable business is – and must be – a compliant one.”
To the people manning the compliance posts around the country, Longo put out a call to arms that extended beyond the traditional exhortation to uphold standards.
“The role of a compliance professional is a critically important one,” he said. “You are part of the fabric of the business – not only to help your organisation meet its legal obligations, but to help create an ethical culture, where employees act in the best interests of its customers. Viewing compliance through this lens means it’s about more than meeting obligations – it’s about meeting, even exceeding, expectations – both investor and societal.”
Compliance should keep an “open and curious mind”, Longo added, “one that asks questions and never stops learning”.
That task will be a steep one, with the role increasingly challenged in areas including evolving technology and sustainability practices. “I think it’s fair to say that the demands and expectations on compliance professionals are growing exponentially,” he said. “Regulatory expectations are becoming ever more complex and nuanced.”
In a recent KPMG survey of chief compliance officers, 84 per cent said they expected to face increasing regulatory expectations in the next two years, while 34 per cent said new regulatory requirements are their biggest challenge.
