The Importance of Compliance Training in Financial Services
Rutherford is proud to introduce its Leadership Series, a series of interviews with key players within the compliance, legal, financial crime and cyber security sectors. These informal conversations will serve as an opportunity for professionals in the financial and professional services industries to get insights on what topics are trending within their field.
We recently sat down with a top Head of Compliance in the asset management world, who has worked in the past at a major UK hedge fund and a big corporate bank, to get their thoughts on the importance of delivering compliance training in financial services and how it can affect the overall culture of a firm when properly conducted.
“The more you can engage with people within the business, the more Heads of Compliance can walk the trading floor, make themselves visible and build relationships.”
In your opinion, is there any correlation between a fund manager’s performance and their overall knowledge of what they are and aren’t allowed to do?
Yes, I think so. My role has always been to guide and advise fund managers on trading and the investments that they make. I would spend a lot of time with them trying to educate them on rules that were applicable to their funds.
Use of funds is subject to investment borrowing and investment powers and rules: the fund manager will need to have some degree of understanding about risk and spread. At the end of the day, fund managers should ideally have some understanding of those rules.
How can compliance training impact the way fund managers operate and the overall culture of a firm?
I have noticed in the past how implementing in-person compliance training can change a firm’s culture. I think people can better understand the importance of compliance and why the firm goes about things in a specific way.
In my case, we would have compliance orientation sessions for new staff, market abuse prevention training and promotions training for marketing and fund managers, or even an annual compliance and AML training for the wider firm. My preference was to always do as much of that face-to-face because it allowed the fund managers and other members of staff to ask questions directly.
Why is it so important in your opinion to drive these training sessions in person?
Whilst you can get a message across via a training platform, the human interaction isn’t there. When it comes to sensitive areas, I believe human interaction is crucial - you need to really convey the message and leave space for questions. The message that you can’t get across on online training is, I guess, the philosophy around risk and how conservative a firm wants to be in terms of its approach to market abuse prevention. A lot of the tone will be missing on a training platform. That’s why I would always personally carry out market abuse prevention training and arrange for in-house counsel to train senior management.