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March 12, 2019

How to Fortify Compliance in Financial Services [Case Study]

Allego gives financial services firms unprecedented visibility into what their salespeople say in the field. The resulting improvements to customer conversations have major implications for enhancing revenue performance.  However, the window they gain into whether or not those conversations are compliant is equally valuable.


Founded in the early 20th century, this firm is one of the oldest asset management companies in the world. With rapidly changing financial markets, they sought a platform to disseminate time-sensitive, critical information to their geographically distributed sales organization in the form of easy-to-create videos. Specifically, the company needed to push market update talk tracks out to the sales force, as well as replicate the performance of top reps by enabling rapid sharing of best practice videos gleaned from the field.  After careful review of several solutions, they chose Allego.

The firm’s Director of Learning and Development knew the success of a solution like this depended on a streamlined approval process for newly created video content. This meant the business and compliance teams would have to partner.

Compliance as Credo Rather than Constraint

The company does business in a strictly regulated environment and compliance factors into every decision they make.  From the reps to the business managers to the actual compliance team, the organization views compliance as everyone’s responsibility.  They knew rolling out Allego would give managers an unprecedented glimpse into what their reps actually say in the field. This kind of internal training tool would ensure salespeople were up-to-date, effective and compliant — before they got in front of customers.

Senior management knew they needed the compliance team deeply involved from the beginning.  “My philosophy has always been, get them in as soon as possible,” the Director said. So when they explored the opportunity to use Allego, compliance took part in the discussion from day one.  “We knew, ultimately, that if this was going to be successful we needed them at the table.”

Being involved from the beginning enabled the compliance team to understand the business objectives the distribution team wanted to achieve with Allego. Management set up meetings for compliance to learn from Allego executives why they created the tool in the first place.  Compliance got to hear exactly how other companies use Allego to gain visibility into customer conversations. This laid the groundwork for the relationship needed to roll out Allego, while giving everyone involved a better understanding of how the platform would help the firm achieve its compliance goals.

A Supervisory Structure

The firm uses a supervisory structure to certify that all messages delivered in the field are compliant.  The structure is built on relationships of accountability and teamwork between senior managers and compliance.  The senior managing director of a given division provides the first layer of oversight. If a manager finds a video they think is a best practice, they work with their divisional director to send it to the senior managing director of the entire division for review.  At that point the senior managing director brings in learning and development as well as compliance. Multiple layers of management collaborate to ensure a given video is compliant.

The firm uses this structure to comply with the spirit as well as the letter of the regulations.  The language used in FINRA regulations often makes it difficult to give an exact prescription for what is permissible and what isn’t.  It’s incredibly important to get multiple perspectives during the approval process by having two or three senior managers with series 24 licenses reviewing learning content.  “If one person’s reviewing something, they’re able to ask another manager, ‘I don’t know, what do you think, do we agree this is a best practice?’” says the Director. “…and if there’s a concern, it doesn’t get approved.”  

If a single best-practice video has the chance to be viewed by salespeople upwards of 600 times as is the case at this firm, managers are more than happy to find time to review it.  The value of the company President’s time is high. The same goes for a portfolio manager, or Chief Economist. It’s well worth management’s effort to review videos in a supervisory structure like this because it saves key players from having to answer the same set of questions again and again.  For example, after the 2016 Presidential election, the firm’s Chief Economist created a video within hours outlining their unique perspective on the likely direction the market was headed so that wholesalers wouldn’t be caught flat-footed talking to clients the next day. “It’s ultimately what’s best for the end client,” says the Director.  “If we have our salespeople better trained, and better informed, then ultimately it’s going to be better for our clients.”

Better for Compliance, Better for Business

The firm discovered the supervisory structure actually surfaces great coaching opportunities around both compliance and day-to-day business for senior management. If a divisional director sends what they believe to be best practice videos to their senior managing director for review, a unique opportunity for dialogue emerges should any of those videos have issues. A senior managing director can say, “You know, we won’t put this one in the best practice channel because of x,y, and z,” thereby giving managers valuable feedback they wouldn’t have otherwise known to give.  “At every level there’s learning taking place prior to a video actually falling on the best practices channel” says the Director.

A key takeaway the senior compliance manager related to the Director was that Allego gave him a deeper understanding of the firm’s business. He found it invaluable to have access to best practice videos because seeing what salespeople actually say in the field gives him a more accurate mental model of the market they operate in.  Allego makes compliance teams better business partners by giving a view into what’s really happening on the ground.

“‘See no evil,’ and ‘hear no evil’ is not a long term, viable strategy,” says a national sales manager at the firm.  In the past, compliance groups at asset management firms couldn’t know exactly what messages were being delivered in the field.  And, unfortunately, the culture within some was such that they didn’t always want to.  This has all changed in the industry, and firms like this one are the exemplar.  FINRA compliance comes much easier with the kind of supervision over internal training Allego affords. When managers know exactly what reps say in the field they can reliably judge whether or not they’re compliant.  And if someone strays they can quickly address it. Companies in highly regulated industries now see the value in getting their arms around the messages front-line reps deliver in the field.  In an era where organizations transfer critical business knowledge at increasingly greater speeds, what’s better for compliance is better for business.

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