“The difference between something good and something great is attention to detail.”
– Charles R Swindoll, pastor & author.
The SEC recently published their annual exam priority summary for the broad investment management and broker/dealer community. This is often viewed as the blueprint, or “cheat sheet” of focus for the professionals of the Examination Division. As such, it is imperative for those regulated by the SEC to carefully review the topics listed, determine the applicability to their respective firm, and ensure that the appropriate policies, procedures, and controls are current and up to date.
Based on my 30+ years of experience within the industry, one mantra has served me and my colleagues well during annual preparations for audits/reviews:
“If you say you do something, you had better make sure you’re doing it.”
It is one thing to spend significant resources, time, and capital on professionals to craft an ADV, policies, procedures, and regulatory disclosures only to find that the words on the page are just that, words. There are countless historical examples in which an investment firm incurs a material error or loss or must pay a material fine/reimbursement only to realize that following their own written policies and procedures would have shielded them from turmoil and embarrassment.
Therefore, muster your staff, “divide and conquer” to understand what is meaningful and applicable, put a plan together to review the existing policies/procedures, and then test, test, and test more.
As Charles R. Swindoll highlighted, attention to detail can convert a “good” legal/compliance/regulatory program to one that is “great.”
Joseph Burschinger
Principal Consultant
WMT Advisors LLC