For this installment of our CCO Spotlight series, ComplySci’s CEO Amy Kadomatsu interviewed Paul E. Dunn, Executive Vice President and Chief Compliance Officer at Bluerock Capital Markets, LLC (BCM). BCM serves as the managing broker dealer for Bluerock Real Estate, LLC. Formed in 2010, BCM seeks to provide educational information related to real estate and alternative investment opportunities for financial advisors and their clients. BCM distributes a broad range of alternative investment products exclusively through banks, independent broker dealers and registered investment advisors.
The Path to Growth
Can you start by telling us about your background and how you landed at BCM?
Paul: I think my mother best explained my history as a checkered past, to put it one way. I had a unique journey getting to where I am today. I have a law degree but spent 9 years in law enforcement and from there, I worked as a retail advisor and become interested in the alternative investment space. I ended up spending over 30 years raising capital for real estate investment strategies. I started as the first president at BCM and have been with the firm for 9 years now.
How has BCM changed overall since you started and how has your role within the firm shifted in that timeframe?
Paul: The firm has experienced tremendous growth in the past several years. In 2017, we raised $420 million and by 2019, we raised $1.4 billion. We now have over 60 registered representatives.
As the firm has grown, my role has evolved and a lot of what I do as Chief Administrative Officer and Chief Compliance Officer folds into my experiences in monitoring compliance activities and really making sure the behind the scenes runs as well as the front of the shop.
What has the firm been doing to manage that growth?
Paul: At first, we were somewhat a victim of our own success and soon realized the value of technology and automation. After a certain point of growth, manual spreadsheets were not going to work anymore. That is where solutions like ComplySci take away a lot of the busywork.
“The pandemic has allowed us to focus more on our administrative objectives like team training and recruiting. Although the pandemic has limited personal interaction, we are always looking to support our staff and clients as best as we can.”
Another key component was hiring the best people we could find. A lot of the executive team members are generalists, so it was important that we found highly skilled and knowledgeable employees to fill in the gaps.
A Positive Outlook Post Covid-19
We’ve talked a lot about the changes the firm has experienced as a result of growth. How has the firm had to change in response to the COVID-19 pandemic?
Paul: While the pandemic has certainly impacted business, many responsibilities have been made easier through web conferences. The pandemic has allowed us to focus more on our administrative objectives like team training and recruiting. Although the pandemic has limited face to face interactions, we are always looking to support our staff and clients as best as we can. Instead of responding to new ideas with an immediate “no,” we aim to first consider how we can accomplish requests in a different way.
What are some of your priorities for 2021?
Paul: We are looking to prepare for upcoming regulatory examinations this year. We have had several successful reviews in the past and we never like to be distracted by regulatory issues.
We have also explored some new compliance topics on the horizon, like monitoring employee communications and social media marketing. We also look forward to continued profitability and success.
“I cannot stress enough how critical it is to hire the right people with the specific skill sets that you are looking for. It may take time to find the right person—we spent over a year looking to fill one particular role—but it is important to recruit with discipline.”
BCM is an exciting place to work when you have a vision of the future. We think we will carry the momentum we have had over the last several years and we will look to continue building a strong company as we hire more people. After the restrictions are lifted, we might need to get a bigger office!
From Gold Rush to Rush Hour
Can you tell us what you enjoy doing outside of work?
Paul: I work out of our Newport Beach, California office, and I guess one could say I live the quintessential Southern California lifestyle. I love my walks on the beach. It’s funny, I was chatting with some colleagues the other day about the California state motto: Eureka! It symbolized the excitement of the gold rush era and the influx of people to California during that time. Now we joke that Californians are more likely to celebrate if people move out of the state due to all the traffic we experience!
Finally, what is one piece of advice you would have for others in the industry looking to grow?
Paul: I cannot stress enough how critical it is to hire the right people with the specific skill sets and past documented success that you are looking for. Hiring people with experience, who have seen a lot and know how to appropriately respond is ultimately less expensive than hiring rookies, training, see some fail or make mistakes is far more expensive. It may take time to find the right person,—but it is important to recruit with discipline. We have found some of the brightest and best people, some that can be considered subject matter experts and are qualified to be leaders on their own. Finding the right person and bringing them into the organization is worth all the time and energy of the hiring process.
Editorial Note: At ComplySci, we understand the tremendous value compliance professionals can gain from networking and learning directly from their peers. For the CCO Spotlight blog series, we are sitting down for candid conversations with Chief Compliance Officers from some of the firms we work with. This blog series will share those CCOs’ thoughts, ideas, and best practices for compliance programs with our readers. The views expressed in this blog post are the CCO’s own views and do not necessary reflect the views of their firms.