“Policies and procedures is one of the scariest forms ever,” Tom Giachetti said at a presentation in Denver to advisors and compliance officers Thursday morning.
The session, sponsored by Laserfiche, featured the frank talk and salty language for which Giachetti (right) is known. If you want it straight, Giachetti, chairman of the securities practice group at the law firm of Stark & Stark and a columnist for AdvisorOne, is your man.
The policies and procedures comment is part of a larger story he frequently delivers about the importance of avoiding compliance vendors, or at the very least assuring that the forms they sell are customizable to the particular advisor’s situation and business.
“If the Kool-Aid compliance salesman doesn’t allow you to unlock their PDFs to make changes, fire their a**,” he said. “These are your policies and procedures and it’s your backside on the line. The salesman won’t be there when you get examined. It’s a case of one size fits nobody.”
What Your Peers Are Reading
He asked how many in the audience feel like they have a strong “culture of compliance” to a number of raised hands. As he ticked off a list of must-haves, however, hands began to drop.
“How many of you have a whistleblower policy in place?” he asked. “It’s been required for the past two years. How many of you have a pay-to-play policy in place? That’s been required for three years. If any of your forms have 2009 or 2010 on them, you don’t have a culture of compliance. Throw them out and get new ones.”
Claiming that he could cut the cost and time of the attendees’ compliance-related issues in half, Giachetti said he didn’t want them to have “knee-jerk reactions to compliance or to abide by things that don’t make sense. These are your policies and procedures, but most of you have them in place because you heard from someone else that you needed them.”
He related a story of a phone call he recently had with a chief compliance officer and an advisor at her firm.