Protect Your Profits through Compliance, Communication and Education

By Oyster Consulting LLC

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When it comes to compliance, your revenue stream is only as strong as your regulatory and client relationships.  Making a million in revenue means very little if you pay a $500,000 fine.  How do you protect that revenue?


Follow the rules and regulations and watch closely to ensure your employees do the same. A strong Compliance Program can make the difference between keeping that million-dollar revenue and paying it out to FINRA or the Securities Exchange Commission.

But how do you protect against client complaints, lawsuits, and arbitrations? That one isn’t so clear cut. There are really only two ways to mitigate the risk of a client complaint: educate and communicate.


The markets react to their environment and there may not be much a firm can do about that. Very few people would have expected a viral outbreak to cause a market fluctuation like we are seeing.  Many firms have newsletters that talk about volatility and its causes, but how many clients see past the emotion of a downturn and logically look at newsletters or websites?  If your attempts at education haven’t worked or prepared your clients for downturns in the market, communication can make all the difference.


Many advisors and registered reps cringe when the phone rings if the market is down. But there are also plenty who take the bull (or the bear in this case) by the horns and reach out as soon as volatility starts.  Those firms whose reps communicate even when it isn’t time for the client annual review not only tend to see less complaints, but if properly recorded, have documentation showing their efforts if the complaint comes.

Advisors and reps need to take the time to talk it out with their clients and determine whether to ride out the storm or take shelter. An annual review in four months won’t help if the market turns upside down in two months.  Timing is everything.

For compliance, training on communication and documentation is important. Conversations with clients usually won’t mean a thing when a complaint is processed if they are not well documented and regulator/attorney friendly. Consider making “SMART” notes:

  • Succinct – Notes don’t have to be long to be effective.
  • Memorable – The notes need to tell you enough that you will remember the conversation and the reason for the decisions you made five or six years from now.
  • Articulate – Using acronyms you might not remember in three years or that have multiple meanings to multiple people might backfire.
  • Readable – Handwritten notes are fine, but they must be legible. How will you prove they were taken three years back?  A timestamped log in a reliable contact management system will be much more effective when need in an arbitration or civil suit.
  • Tactful – Making what seem like “funny” or sarcastic comments about a client in your personal notes will not read well to an arbitration panel.

The bottom line is that nothing – not texting (and remember to have those archived), not emailing, newsletters, robocalls – nothing takes the place of a real conversation.  Clients want to hear from their advisors and reps.  Training a firm’s associates when to communicate, what to communicate and how to communicate may be all Compliance can contribute in times of volatility, so it should be done effectively.

Within the Oyster Solutions Software, we document everything, every calendar item within a Compliance Program, every training session and every decision.  We don’t just do it with an eye toward what will help later in an arbitration or regulatory dispute, but we do it knowing that one place to go for anything Compliance-related makes a firm more efficient and makes Compliance a less burdensome task. Solutions offers customized workflows that work the way each firm needs them to work to offer the best process to fit that firm’s business model, client model and way of life.

For more information about Oyster’s training and education assistance, or to request a demo of Oyster Solutions software, click here, or call (804) 965-5400 and one of our Relationship Managers will be happy to help you.

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