Choosing a Compliance Partner (and why you should have one)

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Regulatory compliance, risk assessment, and risk remediation for your business can be an overwhelming task. To simplify this process, some agents and advisors choose to partner with a compliance expert. Whether you choose to hire someone in-house or engage with a consultant, you will want to ensure they are right for your practice.  Agents and Advisors will want to consider two factors:

  • Do they have the right type of experience and expertise?
  • Will they be able to offer you practical advice and guidance?


Let’s examine each of these factors a bit more closely.

The Right Balance of Experience and Expertise

First, do they have the right type of experience and expertise?  There are many compliance professionals in the country and, as with any large group, some are better than others.  However, it is important for you to dig deeper if you want to partner with the right compliance resource. Here are a few details you will want to identify:

  • Determine how much compliance experience they bring to the table.Some compliance professionals state that they have been in the industry for many years, but it is important to determine how many of those years (and how recently) were spent in compliance. For example, someone may have been in the financial services industry for 20 years, but only spent 4 of those years in compliance and the other 16 years in customer service or operations “where they worked closely with the compliance department on compliance matters.”  Translation: they have limited compliance experience. Compliance requires dedicated focus to develop expertise and can generally be obtained only by working in the compliance field full-time.


  • Find out about their area(s) of compliance expertise. While there are some similarities between broker-dealer compliance, RIA compliance, and insurance compliance, there are also some dramatic differences. It is therefore important to find someone with the right kind of expertise for your needs.  For example, if you are looking for someone to assist you with your insurance compliance needs, you need someone with insurance compliance experience. It’s sort of like finding a doctor.  If you are about to have open heart surgery, you want a cardiothoracic surgeon, not a plastic surgeon.  They are both doctors, but they have very different areas of expertise.


  • Find out even more about their area(s) of compliance expertise. Within compliance, there can be different areas of focus.  For example, some insurance compliance professionals focus on filing products with the states on behalf of insurance carriers. Others focus on sales and distribution compliance.  By learning more about their areas of compliance expertise, you’ll be able to find one that matches your needs.

Practical Compliance Advice and Guidance In Practice

Now let’s move on to the second factor to consider – will they be able to offer you practical advice and guidance?  It seems intuitive that if someone has experience and expertise in a specific industry that they should be able to offer you practical advice and guidance.  However, that isn’t necessarily the case.

For example, let’s consider attorneys. Attorneys, like doctors, specialize in different areas. For example, some may focus on contract law, some on Department of Labor fiduciary issues, some on criminal defense, etc.  However, in many cases, attorneys haven’t worked “on the front lines” and had to become involved in the details of implementing policies and procedures. They provide legal advice based on their review of the law, court rulings and interpretations, etc.  That is typically very different from developing a process, determining what to say and how to document it, what systems to use, what words are okay to use in advertising and which are not, etc.  Putting the requirements of laws and regulations into actionable, practical steps is what compliance professionals do. (Please note that I am not diminishing the important role of attorneys.  I am simply pointing out a common difference between attorneys and compliance professionals!)

The different roles of attorneys and compliance professionals is only one example of something to consider when determining if your compliance professional can offer you practical advice and guidance.

Questions to ask a Compliance Partner

You should also consider if your compliance partner has actual experience with implementing compliance protocols with respect to your specific needs.  A few questions to consider:

  • Have they worked with producers with your business model?


  • Have they designed a compliance process for your need? Have they reviewed field-generated advertising for compliance?


  • Are they seasoned consultants, or did they just start a consulting practice a few months ago because they got laid off from their corporate job?


You will also be able to get a feel for their communication style when you speak with them.  Better communication obviously has an impact on their ability to provide you with practical advice and guidance.

Protecting your business in this time of increasing regulation is critically important.  Compliance is often easier and less expensive than you may think.  Like with so many other things, it pays to not procrastinate when it comes to meeting regulatory requirements.


Invest the Time to Identify the Right Compliance Partner

Follow the steps above to find the right compliance partner for you.  It may take a little more time to find the right one for you, but once it’s done, you’ll be able to focus on growing your business knowing that your compliance risks have been handled.

Not ready to engage a compliance partner? View our Compliance Self Assessment blog post and complimentary compliance checklist.


Questions about this topic or any other compliance issues?  The professionals at DMI stand ready to assist you with all aspects of your business, including compliance.  Part of DMI’s commitment to your success includes a partnership with Summit Compliance Group, LLC, a leading provider of compliance services for the financial services industry.