Some agents find that being in compliance with state and National Association of Securities Dealers regulations and company procedures is easy, while others find it difficult. Some agents find that in spite of their efforts, they keep making mistakes that result in audits, investigations or examinations by the companies with which they do business. These investigations usually amount to questions about what the agent did and his or her rationale for doing them that require written answers. They can create anxiety and be time-consuming.
Some agents repeatedly find they make compliance or market conduct mistakes that lead to warnings or sanctions when they are audited. Some agents, sadly, lose their contracts with the companies with which they do business and lose their NASD registration.
Why is it that some agents find complying with rules, regulations and procedures easy? Why do some agents never have a problem with compliance and market conduct? The answer may be that they have the right attitude toward it. The “psychology” of good compliance and market conduct is something that seems to differentiate between compliance being easy and hard to accomplish.
The following “psychological characteristics” can help an agent be in compliance and have appropriate market conduct.
A healthy paranoia
A healthy fear can be very motivating. It can help you avoid getting into dangerous situations. Agents who feel a little defensive about compliance and market conduct tend to be more cautious and reflective about what they do. A healthy paranoia about compliance issues makes an agent careful about what he or she says to clients. To avoid misunderstandings, these agents will often seek acknowledgement from clients about what they thought the agents said.
Some agents temper their trust and faith in clients and companies when it comes to compliance and market conduct. They often use signed disclosure forms so they are assured that if issues arise, they have proof that they provided the proper disclosure and followed regulations and procedures. Finally, when someone tells them something is OK, before doing it or using it, an agent with a healthy paranoia will check it out. For example, when told by a vendor that a selling system is in compliance, the agent checks with the companies he or she represents to make certain.
Compulsive about details