Audits often make financial advisors anxious, but they don’t have to. In fact, say compliance professionals, a branch audit can be a learning experience that both helps you better serve your clients and prevents problems.

Although audits have been regarded as negative experiences, that attitude is changing, says John Kelleway, regional vice president in Toronto-based DundeeWealth Inc.’ s retail division. “Given what we’ve seen,” he says, “advisors recognize the value of having a good, compliant business.”

Kirsty MacDonald, manager of branch audit and advisor compliance training at Assante Wealth Management (Canada) Ltd. in Toronto, says her firm emphasizes communication and education in its effort to change old perceptions. “We believe in the partnership between auditors and our advisors,” she says. Gone are the days, she adds, when it was intimidating to have compliance officers or auditors in your branch.”

Although every firm has its own policies for audits, Kelleway and MacDonald offer these insights to help you better understand how to get through a compliance audit successfully.

> Stay Informed

Whether or not you are expecting an audit, MacDonald says, it’s important to stay informed on policy changes from the regulators.

“We are auditing primarily for regulatory requirements,” she says. “So, if [you’re] current with the policies, there is less chance of us finding a deficiency in the branch.”

> Keep Accurate Notes

It may sound obvious, but it’s important to keep accurate notes and records of client interactions. Assante places so much importance on note-taking that it gives presentations to advisors on note-taking, stressing the kinds of details advisors need to record. The firm provides notepads for advisors to use as checklists when speaking with clients, MacDonald says. “Accurate notes and records are your best line of defence,” she says, “when it comes to any type of complaint.”

> Keep Communication Open

For MacDonald, better overall communication is improving the way advisors feel about audits. MacDonald and her team encourage advisors to ask questions before, during and after an audit: “We always stress that our lines of communication are always open.”

Assante sends a checklist to the branch before an audit occurs to explain what information and material auditors require and what processes they will be reviewing. The firm’s auditors encourage feedback from advisors about their audit experience.

“It’s great when they give us feedback,” says MacDonald, who encourages advisors to ask her where there is room for improvement in their practices. “[Advisors] really open up after these audits because of the lines of communication we have with them.”

> Learning Opportunities

Assante organizes training programs for advisors in which they can review and learn about any problems or potential problems discovered during an audit. “We do branch professional-development days after the audit,” MacDonald says, “to ensure that [the advisors] understand all the policies and procedures and any deficiencies that we found.”

One objective of Dundee’s advisor education program is to take some of the anxiety out of audits. As well, Dundee has launched a program called My Practice, which helps advisors use company processes to create a more compliant business.

Even if you take diligent notes and try to keep up with changes to regulatory requirements, chances are an auditor will still find something lacking. The point, MacDonald says, is for auditors and advisors to work together, not against each other. IE