In 2011, Marc Berube bought another practice, and suddenly the 18-year MDRT member from Laval, Quebec, Canada, had twice as many advisors to manage. He needed help overseeing compliance work, so he put an advisor on staff in charge of those responsibilities.
In retrospect, it was not the right move.
“We kept growing and growing, and the tension caused by having someone in the office doing compliance was not very good for the mood of the team,” he said.
Since 2016, Berube, who handles insurance and investments for professionals and business owners across Quebec, has tasked an outside contractor with handling his practice’s compliance. He couldn’t recommend this approach more highly, and it’s not hard to see why, considering the following benefits:
1. Accountability. Local regulations require evaluations of 10% of all the files advisors handle, which can be a lot to wrangle with 15 advisors on staff. Six months after Berube’s new compliance officer started, the practice received a call saying they had been selected for an audit, and the auditors specifically complimented Berube’s decision to hire from outside.
Obviously the No. 1 goal of compliance is, well, compliance, and being complimented by those who examine what you do is a sign things are going well — especially because the compliance officer has the authority to terminate an advisor who is not compliant, ensuring the team takes his role seriously.
2. Efficiency. Rather than Berube or a colleague spending time on compliance, the contracted officer comes into the office every six weeks and focuses on nothing but compliance work. He gives the staff notice a few weeks in advance about what he will need, and a week after the evaluation provides Berube a three-page report that he simply needs to read and sign.
In addition to convenient proof that his compliant obligations have been met, this provides Berube more time to focus on getting new clients, which is more in line with his strengths and drives more revenue.
This strategy also means staff can focus on providing the materials on the day the officer will be coming in — rather than having an opportunity to say “Oh, I’ll give it to you tomorrow” to an in-house officer.
3. Objectivity. By not being a permanent fixture in the office, the outsource compliance officer does not have the same personal relationships that could impact the ability to do his job.
By contrast, the previous in-house officer’s work could have been complicated by closer contact and relationships with colleagues, including one who was her husband. Also, when the officer was in-house, no one was overseeing her compliance, which is no longer an issue either.
4. Morale. Berube puts it in no uncertain terms: “When I assigned someone in the office to be responsible for compliance, that person became the enemy.”
Of course, it wasn’t that anyone in the office didn’t want to be compliant, just that it can be challenging and stressful to manage all of the elements required for compliance, and it is not surprising conflict could emerge when a colleague is frequently asking for follow-up information.
We kept growing and growing, and the tension caused by having someone in the office doing compliance was not very good for the mood of the team.
5. Education. Every year, the firm has two offsite meetings that last for two days each, and at these meetings the compliance officer comes and educates the group. This allows him to give feedback to the staff as a whole and one-on-one communication as needed as well, which helps everyone keep up as regulations change.
The officer’s knowledge and experience also help others understand what they’re doing. “Instead of just telling people they are wrong or missing information, he’s also explaining why they need that and the reason he’s asking for everything. Everybody has been very happy with the change.”