Choosing a compliance consultancy
- Posted on: 17 August 2020
Financial services compliance is certainly not getting any easier, in fact many would argue it is getting more complex. Regulators producing a continuous stream of regulatory updates, consultations and thematic reviews, and each year introducing something new. With the spectre of greater personal liability, regulatory actions, and fines, it is more important than ever for firms to have the right level of resources, skills, knowledge and experience. For most firms that means using specialist consultancies to strengthen their regulatory compliance capabilities.
Whether you’re seeking a compliance partner for the first time or want to benchmark your current provider, the question is “how do you select the right compliance consultancy partner?” Here we offer a 'Ten Point Selection Criteria' that you can use in your procurement process.
1. Knowledge and experience
There are really two key aspects, the firm and the proposed account team. You want both to have knowledge and experience delivering the services that you require and in your sector. A deep understanding of how the Financial Conduct Authority and, if relevant, Prudential Regulation Authority regulations apply to your firm.
To prove the firm and account team have the knowledge and experience, you could ask pertinant questions during the procurement process and check their qualifications and client testimonials. Do they have clients with a similar profile to your firm? Have you obtained two or three references from their existing clients? Are these clients serviced by the senior consultant and/or account team being proposed for your firm? Have you reviewed the biographies of the proposed account team and do they have appropriate qualifications and experience?
2. 'A' team versus your team
Many consultancies will use their most senior and experienced consultants during the sales process – their ‘A’ team. They are skilled and competent professionals that present a compelling proposition. However, you then rarely get to see them and they aren’t involved in any aspect of the day-to-day service and detail. So, who will actually provide your service and who is your lead consultant and first point of contact?
3. Team chemistry
It’s important to have shared values and the feeling that you can work well with the consultancy you select. Take a look at the consultancy’s values, they will normally be on their website. Are they distinctive, rather than ‘off the shelf’ statements and can you see these behaviours in your interactions with the consultancy?
4. Service support depth and breadth
Can the compliance consultancy offer the service you are looking for? Have they confirmed the precise detail in writing?
Another point that is perhaps more relevant for firms that are seeking an ongoing retained service, is to consider what happens if your main contact is unavailable for any reason. Do they have the supporting resources you would expect? Are these people on your ‘Account Team’ and will you get the chance to meet them? And will they understand your account and the status of the service being provided?
Finally, if you need help in a specialist area, such as financial crime, what is the breadth of their capability. After all, a key reason for using a consultancy is to complement or supplement your team’s knowledge and capacity.
5. Bespoke service from a compliance partner
A partner always works with you to achieve your goals. So, has the compliance consultancy taken the time to understand your firm and its requirements and tailored their service offering? A bespoke service always provides more value, after all with an ‘off the shelf’ solution you either pay for services you don’t need or the scope of service does not extend far enough. An off the shelf approach runs the risk that you won’t have compliance assurance and the peace of mind you need and you certainly may not get value for money.
In bespoking the service have they outlined the fees for each element of the service so you can have full transparency and awareness of the pricing impact should solutions be changed in the future?
6. Regulatory updates
Will the compliance consultancy provide you with relevant regulatory updates? Enquire as to what the consultancy’s process is around the production and maintenance of these.
7. Using technology to add value
What systems does the consultancy have to interact with you? Do they offer access to compliance tools and customisable document templates that could make your life easier? A built-in drop-box, efficient access to regulatory updates, a place where visit agenda, reports and the like can be stored as well as your policy and procedures framework. Leading compliance consultancies will have Client Portals that do this and more.
Stability is important in any business and particular one you are buying services from. Consultancy staff turnover may be indicative of an underlying cultural issue within a firm. No firm can ever guarantee how long any member of the team will stay, but if a consultancy is experiencing high staff turnover there is an increased likelihood that your own consultant or members of your account team may leave.
If that happens it causes disruption to your business, thus why it’s important to enquire about it as part of your consultancy due diligence process.
9. Member of a professional association
Is the consultancy a member of a trade association and if not, why not? Associations can give useful access to relevant contacts at the regulators and a ‘heads up’ and insight as to what is coming down the tracks.
10. Professional indemnity insurance
Does the consultancy have professional indemnity insurance and does this cover the services they are offering?
If you’re seeking a compliance partner for the first time or want to benchmark your current provider, then please do take a look at the services we offer.