Compliance Consultants – Are they really necessary?

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10 October 2019

Compliance Consultants or In-house Compliance Function?

The question of whether to use a compliance consultant can be a difficult one to answer.  Even more so, if you purely focus on outsourcing as an additional cost to your business.  If this is your focus, you are focusing on the wrong thing!  Good consultancies will potentially save you money.

Compliance has changed considerably over the last few years.  No longer the tick-box formidable business prevention units that kicked back on everything, it has grown into a business-enabling function.

Have you identified your biggest risks or where you are vulnerable, do you even know? This is a fundamental action that not many firms actually do, let alone discuss and articulate with colleagues and agree on a risk reduction strategy.  Many firms just react to the depressing financial press or peer conversations during a CPD event.

Benefits

There are enormous benefits to using a compliance consultant instead of, or in conjunction with, in-house compliance.  Firstly, the consultant is external, there is no conflict of interest and can be very objective as you won’t be paying their salary.   One of the biggest concerns of internal compliance is that they can sometimes be compromised as they don’t have the autonomy as they are seen as merely performing a role for which each month they get their salary, sometimes that role either isn’t experienced, qualified or confident to speak up.   Compliance covers such a wide range of disciplines that no one person is capable of knowing every aspect of regulation.   An external view can sometimes see something from a very different angle.   It is this very fact that PI Insurers can look favourably on firms who use an external experienced consultancy.

A good consultant will meet with you first to decide on the level of service you need, this really will depend on your firm, the risks and the systems and controls you have in place.  It is very often the case that the first few meetings are slightly more regular to make sure you are on the right tracks or conversely to get you on the right tracks.   Consultants will discuss with you their area of expertise, if they are a one man band can they really know everything there is to know.  If they aren’t able to help they should be honest and tell you, early on.

What services can I expect from a Compliance Consultant?

The services you can expect from a consultancy is vast and again this will depend on your needs, this can range from: –

• An initial assessment of your highest risks and a plan to reduce or manage
• An audit of policies and procedures
• File assessments
• Training sessions
• Business development
• Applications to the FCA
• Weekly compliance updates
• Project work

The rise of compliance consultants over the past 10 years has been quite significant and coupled with the fact that there isn’t a universal standard to call yourself a “consultant” the choice can be overwhelming.  But getting the right consultancy is crucial, our checklist might help:

We are proud to say our consultants tick all of these boxes, so, are compliance consultants necessary? We would say absolutely, yes.

To find out more about how we can help with your compliance.  Get in touch today.