Looking back on the “good ol’ days” of the Financial Services industry of 2007, compliance was not such a common word to hear. Yes, there were CE requirements. Yes, there were rules to adhere to. And Yes, there were audits. However, what didn’t exist in 2007 that exists today is transparency to the general population! What also didn’t exist in 2007 was the perception that being a Financial Advisor was a Profession. The bad news is that Compliance is here to stay, but is it bad news?
The level of Compliance permeating the industry today is a clear reaction to circa 2008 Wall Street, and Bernie Madoff. The rules are there to spell out in obvious ways what should and shouldn’t be done. Just think of the warning on the side of a Tim Horton’s coffee cup… “Caution: Hot”! The industry as a collection of Governing Bodies has tried to think of all of the ways that a client can be wronged, and created a rule to say you shouldn’t do that. If a rule seems obvious to you, then that is a good sign, as it should be obvious. But be prepared because there are going to be more rule changes coming into the future, to ensure that the clients’ best interest is safeguarded.
CE Compliance is also changing, as it has also evolved over the past 10 years. Verifiable CE Credits are now common for almost every License and Designation across Canada. CE Categories have also been added to ensure that Financial Advisors are getting a well-rounded education. More recently mandatory CE Credits have been added as well. Continuing Education is the part of compliance that seems to garner the most resistance among Financial Advisors. The interesting thing is that most professions in Canada have a Continuing Education Requirement to renew their licensing. Doctors, Dentists, Lawyers, Accountants, Real Estate Agents and Mortgage Professionals all have a CE Requirement in order to stay “current”. Continuing Education is the mark of being a professional! Perhaps this is why the Governing Bodies have embraced it so.
The final piece of the Compliance puzzle is the Audit. The Audit is the tool of enforcement for the Governing Bodies. Without it, why would any professional comply? Just taking a closer look at the word enFORCEment shows the benefit of the Audit process. Perhaps it is the threat of an audit gives Advisors the incentive to comply with the rules. Perhaps Advisors comply with the rules because it is the right thing to do for their clients. Hopefully Financial Advisors accept the new and increasing levels of Compliance of the industry because they see themselves as true Professionals.