On today’s episode, Jason is going to talk to David Reeve CEO of InvestorCOM. The company is a provider of regulatory compliance software and communications solutions for wealth managers, asset managers, and insurers in the financial services industry.
Episode Highlights:
- 00.34: InvestorCom has been around for over 25 years. For the last decade, we have been working exclusively in the wealth management industry and specifically helping wealth firms deal with new regulations, says David.
- 01.35: David says they managed documents for industries like wealth management and other financial services sectors that are very document heavy. The business really evolved from one of managing physical documents to digital documents and now software.
- 01.59: The western world of wealth compliance is all about disclosure, typically residing in documents.
- 03.27: There has been a lot of regulatory change in the last couple of years US, Canada, around the world, and Australia for certain, and this has been almost unprecedented to the degree to which we have seen such compliance to wave rollout, Jason says.
- 04.45 David explains what they try and do is work with firms to digitize processes and make some of the cost go away so one can, not just layer on additional people to comply with these new regulatory requirements.
- 05.54: There are a couple things firms are adopting digitization more broadly, and then that is jumping over the fence into the compliance department, says David.
- 08.01: In a practice management standpoint, if you are developing model portfolios and rolling that across your entire firm and then validating those portfolio decisions on a semi-frequent basis, you are ok, says David.
- 09.38: It is a world of increasing complexity, and as per David what the regulators are saying is we need to create some standards around how products and advice are recommended.
- 10.58 Jason says that when the numbers update, that is all changed next month, and this has been a real challenge. They must have been turning to say, not only how do you help us do this, but what are we supposed to be doing in the first place?
- 12.32: David says as a firm, we were getting some really good feedback on these peer rating concepts, and we are trying to create that standard as a front for the industry.
- 15.32: It is exciting to be able to help clients comply, check the box often, build relationships with their clients by having more informed disclosure in doing all of this in a reasonably economical way, says David.
- 17.12: We will be working on digital platforms that also enable or connect to all kinds of stuff in different sources, says Jason.
- 19.12: According to David, moving some of the diligence up to pre-trade is a pretty big opportunity for the industry.
- 20.10: Jason asks, “If you were to sum up the overarching trends you see around the world and the bigger challenges in terms of regulation, then, by all means, tell the listeners how you are solving or helping people with this work?
- 22.50: When you get into some of the requirements where you need to have advisors change behavior, that is where regulatory becomes much more challenging, says David.
- 23.45: As a partner to firms, you need to start thinking about elements of making technology as invisible as possible.
- 24.10: The whole area around adoption and encouraging adoption, making technology as light and invisible as possible is vitally important as we move forward, and of course, fortunately, technology is moving in that direction as well.
- 24.41: Technology is not your strategy; technology needs to enable your strategy, which is what last upon people looking for magic or solar bullet.
3 Key Points:
- There is a bit of debate in the industry whether compliance should be disclosure-driven or whether it should. Regulators should be looking at other aspects within the sector, but the reality is compliance.
- The industry matures as data is available as standards are available. It is a tremendous opportunity for the regulators to encourage the industry to adopt some of the standards and leverage technology to comply.
- Traditional wealth firms are enjoying B2B model, and the user experience is dramatically better and more efficient.
Tweetable Quotes:
- “There is a huge wave of new regulations that add at the retail well space in the last several years, and we really positioned ourselves as providing compliance pain relief with the technology that we provide to our clients.” – David
- “The industries are starting to recognize the value of technology as being actually a competitive advantage because you don’t need to layer on additional people plus you can meet your compliance requirements without interrupting the workflow of the advisor.” – David
- “The regulators are a little more focused on the traditional brokerage model where products are being sold, and they are concerned about potential conflicts of interest in that Channel.” – David
- “If we don’t deliver solutions that provide high value to our clients and they’re going to buy them.” – David
- It is not about putting the work on the advisor anymore; it is about creating a workflow for an advisor to be able to go through with his little friction.” - Jason
Resources Mentioned:
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