RCK Partners grew rapidly last year, and as our compliance team expands, we have been reflecting on what it means to be compliant within financial consultancy, and why it is so important to the work we do.
Trust is at the foundation of any successful relationship; both trust that you have each other’s best interests at heart, and that you have the capacity to deliver on your promises. Crucially, any company or client paying for financial advice deserves to know that their interests and security are being properly safeguarded.
When providing professional services, everyone knows that it is important to not only comply with the relevant laws and ethical standards, but also to be able to show and evidence this compliance. Ideally, you want your best technical people preparing your work. Equally, you want to make sure the review and authorisation is carried out by people with the relevant expertise. Of course, your processes and documentation should also be designed by people whose knowledge and skills are top notch. The problem, of course, is these are often the same people. You are left with a situation where you either rely on peer review (which in many sectors is not practical, or even forbidden by regulation) or alternatively accept that you are using time that could be spent on “delivery” for compliance purposes – a real cost to the business.
A dedicated compliance team is, unavoidably, sometimes viewed as a pure cost centre in the business, as it does not generate revenue. As such, alternatives are often applied, where peer review is not possible you might find a model where senior staff are promoted into review positions. A large accountancy firm might have all reviews carried out at partner level, for example. This carries with it risks, of course, as you are losing the time of someone who is invariably a top performer and having them carry out work that has a different, if related, skillset.
It is easy to overlook the benefits of a strong compliance function, as they can be invisible. No one ever knows how many problems have been avoided, or costs dodged as a result of timely intervention. Even the direct activities are hard to quantify, a conversation with an HMRC Inspector to explain an approach, or a training session with staff to discuss the latest guidance can be both invaluable and hard to value!
We lean toward the idea that having a team focused on nothing but compliance, and keeping to the highest standards, offers significant advantages over other approaches we have seen and tried. Decisions can be made without the pressure of sales targets or goals, and difficult conversations can be raised without concerns about competition or self-interest. It also means that time can be dedicated to those tasks that can slip back under the pressure of everyday delivery, such as updating training and development, improving delivery processes, and monitoring whether our approaches are remaining in line with industry best practice.
A separate, dedicated team allows us to apply the expertise of our compliance team members where it matters most. Above all, the team is dedicated to ensuring everything that gets submitted to HMRC is not only accurate and in line with the legislative guidance but is also clear to someone who has not been immersed in the preparation of the claim from start to finish. Separating this function from the core delivery team allows a separation of duties so that this function can be more reliable and verifiable.
There isn't one perfect way to approach all of this, and much can change in the space of a few short years. I suspect COVID-19 did more for the paperless office than any number of digital document systems! In the future the view on the topic, will have moved on as much as technology has, but by keeping the challenge of compliance in the forefront of our minds, we can make sure that we do not become complacent. Rather than sleepwalking into greater problems down the line, the aim is to face each new challenge head-on as it arises and (with any luck) rise to the occasion once again.
Looking ahead
It’s all too easy to focus on the technical conversations and the exciting developments that clients are making, but we think taking compliance seriously is paramount. Ideally, the function of the compliance team is not merely to review work, but ultimately to ensure that issues never arrive in the first place.
As we head further into 2023, we have plans to grow the team, and ensure that every aspect of risk and compliance is covered.
As RCK Partners flourishes, we will make certain that our entire team are ahead of the needs of the businesses and the industries that we work with, and we will continue to build out our support teams as quickly as our delivery.
Read our Code of Practice here.
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