7 minute read
PRACTICE MANAGEMENT
from ASSET Winter 2022
by ASSET
LEAD
Allow me to help you stop procrastinating
Compliance consultant Karty Mayne details how to ensure you meet the regulatory deadlines – and how to maximise a compliance calendar for the year ahead.
BY KARTY MAYNE
As we move through the second quarter of 2022, it is frightening how fast the year is progressing. But the regulatory deadlines on the horizon will move at light speed.
Understanding the components of your regulatory compliance framework is an easy way to make sure your business has covered all bases, regardless of your size, scale or complexity.
Your regulatory compliance framework
A “fit for purpose” framework means that you have done enough to meet the regulatory obligations as they apply to your business.
In general the components will be the same, but the processes which sit behind your policies will be only as detailed as needed to reflect the size and scale of the business.
Imagine that you have a new starter, but no time to train them. Could they understand your business approach, and your end-to-end processes, just by reading through your company compliance manual or operations manual? They should be able to do so.
Here’s how to stop procrastinating and get on with meeting your regulatory deadlines.
1. Sort your Financial Advice Provider licence – and quickly!
If you haven’t applied for your licence, now is the time: • Class 3 licences are due by the end of June • Class 1 and 2 licences are due by the end of September
While your preparation doesn’t have to be perfect, here are some hints about what to have ready for when you do put fingertips to the keyboard to complete the licensing interrogation.
Step 1. Download the Guide for Providers of Financial Advice Services (Version 6). This guide sets out all the questions you will be asked and what the FMA expects to be in place. Step 2. Make sure you have created or updated key policies and documents as required for the licence. The “must have” documents and processes include: • Business continuity plan • Cyber-security arrangements • Your end-to-end advice process and ongoing client-servicing arrangements • Arrangements if you hold client money or client property • How your advisers meet the competency requirements • Ongoing training and development to maintain competency • Oversight policy or governance framework • Outsourcing due diligence • Complaints handling • Conflict of interest management • Record keeping and destruction policy • Conduct and compliance polic • Fit and proper policy
Your licencing timeline
March 2021
Transitional Licence in place Complete preparation for full Licence Class 3 June 2022 Class 1 and 2 September 2022
March 2023
• Staff recruitment, vetting and onboarding processes
Step 3. Once you have developed these processes and procedures, they need to be formally approved and dated. You then have a responsibility to review and update them, either every year or when things change.
So set a review date on the documents. Make a note of these dates as you will be asked for them when you complete your licence application.
Step 4. Having created these new documents to meet your regulatory obligations, you need to put arrangements in place to confirm that you are compliant.
Usually this is in the form of a compliance programme. This explains the compliance activities you will complete during the year.
Step 5. You need to keep evidence of your compliance activities, any breaches or issues, and control tests. Setting up a simple online register is a great way of tracking these activities.
We also recommend creating a monthly compliance calendar to keep you on track during the year.
Link your financial advisers to your full licence.
Once your business has its licence, ensure all your financial advisers are linked to it. This is an easy process.
Start by logging into the Companies Office and finding your FAP on the dashboard. Go into the FAP, find the “financial services” section and click, “maintain financial services”.
Then it’s a simple process to add financial advisers to your full licence.
2. Now that you have your full licence
Once you have obtained your full licence, it is important to implement the policies and processes you created to meet the new regulatory obligations.
Compliance doesn’t have to be complicated. But you do need to allocate enough time and resources to do what you said you were going to do.
Three easy steps to master compliance
Here are three easy steps to make you a compliance master: • Know your sources of truth - familiarise yourself with the Acts and Regulations, standards and codes, guidance notes and industry body, agreements and policies.
Being familiar with these will help you comply with them. • Create new policies – Sometimes it’s better to buy new wool than unravel an old jumper! Create new policies as the foundation of your compliance instead of trying to rewrite the old ones. Keep your policies broad in nature, and make sure you are open to your procedures continually changing and improving. • Get to know your controls – your controls are your checks and balances. Ensure the processes operate as they are designed, whether they are automated or manual; these will keep you safe!
Creating a compliance calendar can help you keep on top of your compliance requirements without getting overwhelmed.
Add reminders to get a couple of compliance tasks completed each month, so you work on it throughout the year instead of all at the last minute.
It is also important to remember what you outlined in your licence application and to hold true to it – this will also help keep you compliant.
Plan, plan and plan some more
Having plans in place is the backbone of staying compliant.
Just as a compliance calendar will help lighten the load, by spreading it out across the year, having a business plan will also help keep you on track.
A business plan can be the difference between success and failure, but make sure you keep it simple (stupid).
These days, large corporate companies have a “plan on a page” so you don’t need anything too detailed. Just enough to keep your goals in sight.
3. Automate your compliance where possible
Now that you have created your regulatory compliance framework, you need to integrate it into your business in a way which balances client management with business management and compliance.
We are seeing great examples of FAPs using everyday software to help remind them and automate these activities.
Utilising software is a cost effective and efficient way to help you automate your compliance and stay on top of your obligations.
We use TeamsPlus (formerly called Dacreed), a New Zealand-based software system which provides a simple compliance dashboard.
We chose it because it is a modern, easy to use and suitable for the smaller scale of New Zealand’s financial services industry. Most importantly, it is affordable for small businesses.
Companies and advisers are able to use these types of software systems in a variety of ways: • Document storage – Keep all your documents in one area, whether upto-date business policies or evidence of professional development. • Courses – Courses can be created and distributed effortlessly using the software, in order to help you meet your continuing professional development obligations. Ensure the software comes with an up-todate course library of relevant and interesting training modules.
• Business policies and attestations
– Forget policy manuals taking up space in your bottom drawer or losing attestation papers; roll out your policies and attestations in an interactive way.
We have set up our policies and compliance attestations in the software, which can then be assigned to a person, with an attestation attached, so you know they have been read and understood.
• Reports – The reporting dashboard allows you to see compliance at a quick and easy glance, making it easy to keep track and to follow up with anyone who is falling behind.
So instead of looking at lots of reports, I can confirm compliance just by looking at our team dashboard.
Good luck on your compliance journey – and remember to utilise the tools around you to make it fast, easy and efficient. A
Here’s my dashboard. Whoops, it looks like I have a course to complete!
