You’ve reviewed your compliance requirements as a financial advice firm (probably using the wise words of our previous article on choosing in-house or outsourced compliance…), figured out the support you need, and have decided at least some of it is to be outsourced.

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Consult the directory APCC

The easiest first step is the APCC Directory which you can find here. Compliance firms are not regulated as advice firms, but the APCC works to ensure a certain level of professional standards for the member firms.  

At the time of writing, there were 155 firms on there (eep!) but by using the filters, many can be ruled out as they focus more on banking or consumer credit firms, for example.  

A good old Google search will help too, so you can browse some websites and see which jumps out as having a natural fit with your business.  

Just think of it like your client using VouchedFor combined with website browsing from a Google search to narrow down their plethora of advice firm options!

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Questions to ask potential compliance providers

When you’ve narrowed down 3-5 firms that might be of interest to you, and having already determined exactly what support you are looking for, some of the questions you might begin to ask are:

1. Can they do what you want them to do?
   
   An obvious one, but can they? Don’t settle.
   

2. How qualified is the team?  
   
   Compliance qualifications can range from the usual Diploma / Chartered (great for practical knowledge, particularly for file checkers) to compliance specific qualifications (great for consultants and those doing audits, to have a broader level of knowledge). How does the provider tie qualifications to roles?
   

3. Is there a broad spread of specialist compliance knowledge?  
   
   Some firms will have dedicated people for each role. Others will give you a single contact who is a bit of a jack of all trades, doing your consultancy as well as your file checks as well as your audits. Which feels most comfortable to you and what your business needs?
   

4. Do they have a technical and / or compliance helpdesk?  
   
   In our experience, one of the most valuable parts of a compliance service for advice firms is the ability to just pick up the phone (or draft a quick email) and get an answer to their burning question. And for that answer to be practical, and not generic / a redirection back to the FCA Handbook!  
   

5. Are their services all bunded up into a single fee?
   
   Does that work for you or could you be paying for stuff you don’t need? Or is a modular approach available, where you can pick and choose the support you need?
   

6. Is the compliance service flexible enough to update your service levels as required?  
   
   Needs change over time. And if your circumstances change, or the compliance service isn’t delivering what you need, how easy is it to leave? Beware those that tie you into improbably long contracts. You should be paying fees each month because you’re feeling real value, not because if you’ve been tied into a complex contract.  
   

7. Do they do anything outside of compliance?  
   
   For example offering services such as paraplanning or marketing can enable you to get a range of support on a single place, with a cohesive regulatory overview applied.

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‘Fair and proportionate’ applies to you too

One of the FCA’s favourite phrases, when looking at your service to clients and making sure you’re not under or over servicing them, is to ensure that what you are delivering is fair and proportionate to their needs.

This is just as important when it comes to your compliance support. One of the biggest bug bears is compliance firms applying a “one size fits all” approach of regulatory standards. If they don’t understand your firm, and can’t tailor their advice to support that, then you are not going to get the service you are paying for.  

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Look for high quality tech

Tech stacks in advice businesses are a nightmare. AI is coming along and causing additional nightmares. You need help navigating the two. When looking for a compliance firm, you should be looking for:

• One that has real, high quality internal tech themselves, preferably one they have built. This shows their commitment to supporting you as well as their understanding of technology, how it works and the challenges around it.
  

• A clear understanding of the tech options out there and an ability to help you assess the ones that are best for your firm.
  

• A solid understanding of AI, plus the FCAs latest updates on it, and an ability to help you understand the market and how to make the most of the opportunity they present, without causing any compliance issues.

If their own approach to tech is a bit dated, they’re unlikely to be able to help you stay ahead of the curve.  

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A word on incentives…

Most compliance providers will use their collective power to negotiate on your behalf. This can be preferential PI or protection rates, or discounts on licences. Using collective bargaining is a good idea and helps get the best value for firms.

However, two warnings:

Firstly, these should be a nice to have, but ultimately, not the thing you choose your provider for. Saving a few quid on some tech will not offset years of unsupportive compliance. Getting cheaper PI premiums but ultimately needing to call on that PI as you weren’t being adequately protected is a false economy.

Secondly, be careful as to what is being done, in return, with your data and with those providers. Compliance should be about compliance, not just about being a distributor and pushing investment funds at you that you have no interest in.  

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Key takeaways

Now armed with your directory knowledge, questions to ask, and tech combined tailored support to look for, choosing your outsourced compliance provider should be a little less daunting.  

But if you need more before taking the leap, our expert team is always happy to take you through the details of all your Verve compliance support options.  

Verve compliance is provided by experts with varied and in-depth experience, using proprietary tech that makes running your business easier. We’ll help you work out what you need, and charge you only for that.

Get in touch to speak with us today.

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