Compliance support at Canada’s big banks comes up short in the eyes of branch planners and advisors, Investment Executive’s 2024 Report Card on Banks reveals. Year-over-year results indicate a general lack of direct communication in this area.
“[For compliance staff], everything is fairly rigid,” said an advisor in Ontario with Bank of Nova Scotia (BNS). “They are very overloaded. They don’t have much time to work on a case.”
An advisor working in Quebec with National Bank of Canada (NBC) said of its compliance staff: “They are present but completely disconnected from reality.” This advisor added that the compliance department has “evolved the least” compared with other divisions, based on its use of older tools and “difficult” processes.
“I don’t find the compliance department helpful,” said an advisor with Royal Bank of Canada’s RBC Financial Planning division. “They tell you what is wrong but not how to fix it, or the reason behind why it is wrong.”
In the 2024 Report Card, the “compliance relationship & support” category was the only area out of 22 to see a significant year-over-year drop (by half a point or more) in its performance average (7.8, down from 8.3 in 2023). The drop was driven mainly by lower results from BNS, NBC and RBC respondents.
Out of those three banks, BNS saw the most pronounced year-over-year drop in its compliance rating, at 6.6 from 7.7 in 2023. NBC’s compliance support was rated 7.4, down from 8.2, while RBC was rated 8.3 in the category, down from 8.8.
Several branch advisors with BNS said they felt disconnected from their compliance department, and wished they could speak directly with compliance officers rather than through their managers.
Still, one advisor with BNS in Alberta indicated signs of improvement through the addition of a new branch supervisory role. These supervisors can take questions regarding compliance issues.
Where help was offered, the focus was on general guidelines, and processes could be inefficient. Said one BNS advisor in British Columbia: “Often if there are multiple errors, they will send back [documents] with one correction. When you make [that] correction, they send it back with the additional correction.”
BNS confirmed in an emailed statement that the new supervisory roles had been introduced in the past year “to support our branches with compliance activities.” The supervisors work alongside branch managers who handle compliance requests, the statement said. “Additionally, advisors have access to support teams and resources to help navigate complex compliance regulations.”
Advisors with NBC also were unhappy with what they perceived as limited compliance access. “We don’t really have the right to speak to [compliance] directly. You must first speak to your manager,” said an NBC advisor in Quebec.
Another NBC advisor in Quebec said, “[Compliance] doesn’t coach. We can’t talk to them.”
Other NBC advisors felt the bank offered online tools as a means of primary communication, a change from the past.
For example, an NBC advisor who also was in Quebec said, “Before, we could speak to [the compliance team] directly. It was faster. Now, you have to send an email. They are [supposed to be] business partners and not police officers.”
Tony Scalia, vice-president of investments with NBC, said, “We have [compliance] teams in place that communicate with our advisors constantly.” The bank also runs monthly calls with financial planners, he added. Plus, the lead compliance officer sits on Scalia’s management committee and can pass on “irritants” that advisors have shared with them.
Scalia acknowledged that communication can be challenging when advisors and compliance staff don’t understand what’s needed from one another.
Some advisors with RBC felt conversations with compliance staff about their clients were unproductive.
“They tell us when we make a mistake and don’t offer any guidance [regarding] how to fix whatever we did,” said an advisor in the Prairies with RBC. “We are referred to a 20-plus-page manual, which is often updated without notification to us, and we [must] figure it out on our own.”
However, as one RBC respondent in Alberta said, “[Compliance staff] are extremely on top of things. They set an example and they take [their work] seriously. They’re always watching and supporting [and] making sure we’ve done the right thing for our clients.”
An RBC advisor in B.C., who also felt supported, said compliance staff kept them “apprised of changes, providing coaching and support on an ongoing basis.”
Heightened regulatory oversight is a major hurdle in the financial services industry, said Michael Walker, RBC’s vice-president and head of mutual funds distribution and RBC Financial Planning. “The bar keeps going up,” he added, with “a lot of regulations coming out over the last couple of years.” The bank has released how-to videos and manuals, and has a dedicated website covering compliance issues.
“Because more is being asked of [branch] advisors and their managers,” Walker said, “we’re going to lean in and provide [more] regional compliance resourcing and support.”
This article appears in the October issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.