We often speak with firms that use search engines like Bing and Google to assist them with the manual supervision processes.
One such firm recently added Eagle Eye to their supervision processes and quickly discovered immediate returns on their investment within the first three months of its use.
What was that immediate benefit? Reduction of risk.
Now that wasn’t the only benefit, as they saved a lot time as they went through the process. In fact, prior to using Eagle Eye they would often struggle to complete their supervision checks before the end of the quarter and would have to rush during the last two weeks of the period to get it all done. With Eagle Eye, they finished everything with three or four weeks to spare.
But back to our original point, how did they reduce their risk?
Our client not only found the process easy, but more importantly, they uncovered previously unknown compliance risks that were routinely missed by their manual search processes.
Their new set up with Eagle Eye allowed them to scan the web in a manner unlike any they had previously experienced.
With Eagle Eye’s multi-data point scanning capabilities, this client unleashed a virtual army of web crawlers who scoured the web with dozens and dozens of powerful queries. Then Eagle Eye analyzed all of the possible results for each monitored individual and presented the most relevant findings for their review. Our client not only found the process easy, but more importantly, they uncovered previously unknown compliance risks that were routinely missed by their manual search processes. With the revelations of these new regulator risks, our client was able take immediate action and take care of the issue prior to a regulatory event.
The astounding part of the story is that our client was able to accomplish all of this without having to review hundreds and hundreds of results for each monitored individual or firm. In fact, they were able to do so by reviewing just 20 results per monitored individual during their quarterly review.
So the big question looms, what are you missing on your manual searches and can you continue to allow those risks to go unnoticed and unchecked?
I’M SURE I HAVE SOME COMPLIANCE GAPS, BUT DON’T KNOW WHERE TO START...
It can be very challenging for financial firms to search, monitor, and document their advisor's web presence and registered websites without interrupting day-to-day business demands and operations. Yet failure to do so can leave exposed compliance gaps unaddressed and open your firm up to fines and disciplinary actions from regulatory agencies. Common compliance gaps often include improperly documented or improperly enforced policies and procedures, insufficient evidence of a WSP, undisclosed OBAs and social media accounts, as well as rogue advisor websites. Many firms know that they have gaps, but they don’t know where to start.
FINRA publishes a monthly disciplinary report with actions and fines against firms and individuals. One of the most common fines involves undisclosed OBAs. Currently, many firms work on the “honor system” with hopes that their employees with be completely honest and disclose everything required. Unfortunately, this honor system doesn’t always work. How are you to find out if your advisors have an undisclosed OBA? That is where Eagle Eye can help you close this gap with our deep web searching technology that quickly cut through the clutter of the web and bring to your attention relevant results when monitoring your registered reps.
Do you know if your advisors have disclosed all of their social media accounts? In a recent random sampling of 10 employees from a prospective client, our Eagle Eye solution found serious violations with three of the advisors including several OBAs and social media accounts that were never disclosed. This is a typical compliance gap for many firms. Is this one your firm is facing as well?
Are you sure that your firm is monitoring all of your advisors online advertising? Do you have a process in place that is easy to demonstrate to a regulator? Do you even know if they are producing advertising that you are unaware of? This could be another compliance gap your firm is facing.
In addition to all of the supervision regulations, you need to prove that your firm has WSPs in place to help document all of the actions your firm is taking to monitor web presence. For many firms, this turns into another compliance gap they need to address.
You have a broker-dealer responsibility to monitor every website that your advisors' utilize for business purposes. Many times, advisors want to have their own website to help them stand out among the thousands of other financial advisor websites out there. How are you monitoring these websites? Are you notified of every change automatically so that it can be approved? If not, here is another compliance gap you might be facing. Recently there has been an increase in fines imposed by FINRA regarding website monitoring. Just like this fine imposed just a few months ago. SiteQuest Compliance's SQWatcher program is an easy to use solution that will quickly help you fill this gap at a fraction of the cost of a fine.
Then to complete all of this monitoring you need to document all of your findings in an organized manner. Many times this is the last step in the compliance process and yet it can become one of the largest compliance gaps for a firm. Our automated documentation features found as part of our programs are detailed and searchable. We provide you with all of the information you need to respond to a regulator.
SiteQuest Compliance offers programs, support, and experience to help you bridge these gaps and respond to a regulator. A firm that is able to demonstrate compliance with tangible evidence will mitigate risks, such as costly regulatory fines, and be better prepared for unannounced visits from regulatory agencies.
Contact us today and talk to us about any gaps you need help addressing.
About James Cella
James Cella is the President of a growing and innovative compliance technology provider called SiteQuest Compliance. James is a customer-centric individual and focuses on building and sustaining positive and lasting relationship with his clients and partners. James and his family are "super fans" of University of Utah Football and have attended nearly every home game since 2002. Go Utes!