For the purpose of this guide, the terms “compliance consultant or consultant” shall, as the context requires, be taken to mean “a self-employed consultant or a consultancy firm or staff of a consultancy firm.” The precise role of the compliance consultant will be a matter of contract between the parties. Typically, a compliance consultant will provide compliance support services to the regulated firm. These services range from independent compliance reviews, pre-inspection visits, handling crises such as investigations, updating compliance arrangements and carrying out compliance training for staff. This guide does not include the additional steps that will be required if the consultant is to undertake any controlled functions.
(This guide is reviewed regularly and kept up-to-date)
Warning:
At present anyone can set themselves out to be a compliance consultant. Horror stories abound. Due diligence of the highest order should be exercised before entering into a contract for compliance services.
The Key Steps in the due diligence process should, as a minimum, include:-
- Obtain and verify the overall financial services and regulatory experience of the compliance consultant. Are you satisfied with the professional integrity, reputation and competence of the compliance consultant?
- Is the experience of the consultant is of sufficient depth and breadth for the assignments under consideration?
- (a) Is the compliance consultant professionally qualified – i.e. has current membership of a well-respected professional body such as any of the recognised accountancy bodies, Institute of Chartered Secretaries and Administrators, Chartered Insurance Institute, Securities Institute, etc?
(b) Is the compliance consultant a member of a well-respected professional interest group such as The Compliance Register? - (a) Is there a quality control process for the work of the compliance consultant and is this sufficiently rigorous to ensure high professional standards on a consistent basis?
(b) What is the track record of the compliance consultant?
(c) How does the compliance consultant keep his knowledge and skills up-to-date? - Does the compliance consultant have professional indemnity cover at a level that is appropriate to the work being proposed? Beware, some consultants have no professional indemnity cover at all!
- Does the compliance consultant have any conflicts of interest and if there are, how will these be dealt with to ensure that you receive a proper professional service?
- Beware of the cheap/cheaper/cheapest service as this could turn out to be a false economy. You get what you pay for! Remember the cost of non-compliance can be extremely expensive and in certain circumstances, may even be terminal. Quality is paramount. Be prepared to pay for the appropriate quality. Quality is not expensive, it is priceless!
- What are the back-up arrangements for holidays and emergencies? What happens if the consultant is under the proverbial bus?
- How will costs be determined? Do you have control over them?
- Remember you can delegate the function but not the responsibility. If the arrangements go wrong, you will still be held responsible by the FSA. It is therefore vitally important that you choose wisely with due care, skill and diligence.
