Comprehensive System to Implement and Document your Investment Process.
When you’re undergoing a regulatory audit, your most fundamental need is to have quality data to work with. Whether you’re looking at transaction–level data, confirming custodial reporting, or monitoring firm activity — your efforts will only be successful if the data you have is timely and accurate.
Generally speaking, this type of quality data is available at specific points in the transaction chain, but accessing it and working with it is still often a manual process. You can’t gather it easily, and when you are able to gather it, you can’t easily create a repeatable and scalable process. Instead, for a firm to be able to supply regulators with quality data, it’s necessary to gather and process data in an entirely new way. It’s essential to automate — to invest in new technology that enables you to:
- Scale to exponentially greater volumes of data.
- Access the data more quickly than ever before.
- Know that the data is relevant on a macro– and granular scale.
- Use the data for analytics, testing, and whatever is necessary to achieve complete transparency.
Examiners don’t like to be buried in paper. And you don’t want to be seen scrambling to find and generate the needed records come audit time.
Today’s examiners prefer to see electronic recordkeeping — a format that demonstrates a culture of compliance where the needed data is both regularly maintained and easily accessible.
What advisor wouldn’t want this audit experience?
Recently, an Adhesion client firm shared examples of the types of questions they were asked during the firm’s examination — and how their partnership with Adhesion affected the outcome:
“Explain how you determined that the recommended allocations and investments were appropriate for this client.”
The risk profile and proposal generated and stored within the Adhesion platform were instrumental in satisfying the examiners.
“What were the catalysts behind this set of trades on your trade blotter and show us how the affected clients were treated fairly?”
The information was readily available through the Adhesion platform. A clearly documented causal relationship was shown to exist between changes made to a model portfolio and the resultant trades, and that pro–rata allocations from the block trades were applied uniformly across affected client accounts.
“We would like to see the following client lists: New clients during the examination period, lost clients during the examination period, clients by state, and discretionary clients.”
The data–mining capabilities within the Adhesion advisor portal made this information readily accessible and easy to tabulate.
What keeps financial advisors up at night?
Finding enough time in the day to get compliance work done.
#1 pain point → Compliance
Survey of 600 advisors by Principal Financial Group
To respond timely to regulator requests with quality information, it’s necessary to process, store and access data in an entirely new way.