Building Out Your Compliance Team

Rutherford is proud to introduce its Leadership Series, a series of interviews with key players within the compliance, legal, financial crime and cyber security sectors. These informal conversations will serve as an opportunity for professionals in the financial and professional services industries to get insights on what topics are trending within their field.

We recently sat down with a top Head of Compliance in the asset management world, who has worked in the past at a major UK hedge fund and a big corporate bank, to get their thoughts on building out a compliance team and how to shift the internal perception on the compliance department when it is traditionally viewed as tick box exercise.

In your last position, how did you go about building out your compliance team?

When I was hired as Head of Compliance at the last firm I worked for, I didn’t have much knowledge around financial promotions, marketing and client communications. My first months into the new role were very much centred around carrying out a gap analysis and identifying the key areas where specific expertise was required. I ended up hiring someone who had the expertise I was missing and who could run with that side of supporting the business, whilst working with me on the compliance monitoring plan and other areas of compliance when it was appropriate for me to delegate some of the responsibilities to them.

What inspired those thoughts?

When carrying out my gap analysis, I realised that the firm was not necessarily complying with some of the financial promotion rules around communications. Having identified this risk, I needed to find a solution. At the time, I was trying to resolve some front office issues, to implement a control framework around market abuse prevention and so – I didn’t have the time to address this newly-found risk on my own. I needed someone who could come and pick that up for me, identify areas where we could make improvements, and put in place clear processes around the approval of financial relations and use of language – really think about how we would market the funds and the products to our target market.

Building out your compliance team shortly after joining a firm – has it impacted in your opinion the way the business would perceive your function?

Throughout my career, I have noticed how traditional asset managers tend to think about compliance as more of a tick box type exercise. From my perspective, compliance is much more about engaging with the business to try and convey the importance of going about things in the right way. When I made that critical hire when I joined the firm, my goal was to change the thinking around compliance, particularly from a cultural perspective.

For me it was more than just making a hire – it was also about ensuring communication between the compliance function, the marketing and sales teams, and most importantly senior management. We had to manage upwards and provide guidance and advice to the business about setting expectations, then manage downwards by communicating what these expectations are.

I do believe that over time, we were able to shift the culture and position the compliance team as a true business asset instead of a simple ticking box exercise.

What other initiatives did you push forward to drive such a cultural change?

One of the things that we implemented relatively early on was a training program which didn’t exist when I initially joined. I think that really helped people within the business to understand what it meant to work in a regulated environment. I think people sometimes forget this critical aspect of the business, as the focus is mostly centred on driving revenue.