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December 11, 2003 at 07:00 PM
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A common complaint among professionals in the insurance business is keeping up with all the regulatory compliance requirements. Mentioning the word “compliance” to almost anyone elicits a negative reaction, as compliance activities may take up to 25% of an agents time.
“Its a restriction of your freedom,” says a producer from Pennsylvania who did not want to be identified. “Here youre supposed to be in business for yourself and you cant talk to people, or write to people without somebody approving what you do,” he says.
He adds that he cant even stick a post-it note on a document hes sending out to a client without getting approval for what hes written on the note.
Other advisors have shared this same frustration, but William Gettings, a partner with Gettings Reed Financial Services, LLC, Lafayette, Ind., found a way to make this requirement work for his practice. He had a special post-it note printed that says “I thought youd be interested in this,” along with his broker-dealers disclosure statement. Gettings filed the note with his broker-dealer and now he is able to use it when he sends correspondence to his clients.
While following these types of procedures can be an annoyance to registered representatives, many look at compliance procedures in a positive light.
“It needs to be taken very seriously,” says Terrance Kral, a partner with Kral, Goodenough & Kral, Inverness, Ill.
“Compliance forces us to take a closer look at things we ought to be paying attention to anyway,” says Daniel Childress, president of Financial Management Group Inc., Mt. Pleasant, S.C. “It keeps us all safe; it makes sure the clients are well served,” he says.
“In our office, were doing what we can to embrace compliance procedures,” says Gettings. He adds that by documenting every phone call and what was discussed, it not only keeps him in compliance, but it helps him remember what he discussed with his clients.
“Ive had clients come in and ask me to remind them why we did something, and since we had good documentation it was easy to remember,” he says.
“You want to document everythingeverything you put in print and all your phone conversations,” adds Kral. Many times, what a client may think hes asking will be different than what he is actually asking, Kral notes.
Childress has had similar situations where strong documentation due to compliance procedures has helped him serve his clients. “Ive had a couple of situations where the strength of our compliance has shone through,” he says.
