Compliance team member performing annual review

Stop chasing certifications: How compliance technology can help your brokerage firm automate regulatory compliance certifications

Preparing, disseminating, capturing and maintaining regulatory compliance certifications is standard practice at brokerage firms. Some brokerage firms handle certifications at the end of the calendar or fiscal year, whereas others choose to spread the certification requirement process out throughout the year.

Regardless of what schedule your brokerage firm uses, your firm’s compliance team is tasked by regulatory bodies with the responsibility to ensure all covered employees have completed required certifications year after year. While a cumbersome process for the entire brokerage firm, regulatory compliance certifications ensure your firm remains in compliance, educating employees on relevant compliance requirements while building and maintaining clients’ trust.

For brokerage firms, the number of certifications – new on-boarding disclosure certifications, brokerage/investment account holding certifications and accounts, holdings and trade combined certifications – can often eat into calendars and create a barrier to compliance, especially if you are faced with the likely scenario of employees missing the deadline to complete all certifications…which leaves you and your team chasing down certifications year after year.   

While there are many ways your CCO and compliance team can encourage employees to complete their certifications, arguably the most effective way to get this done is by implementing the right technology solution.

How compliance technology can help your brokerage firm track and complete regulatory compliance certifications

A regulatory compliance technology solution which automates the regulatory compliance certification process enables brokerage firms to take the manual out of certification season, programing start and end dates, while easily tracking the status of certifications in process. When configured properly, this compliance technology should automatically alert the target audience to the start of a certification period via email, continually alerting users who haven’t completed the certifications. The system should also include functionality which can alert supervisors or the compliance department when users fail to complete mandatory certifications within the required time period.

Features like these lessen the burden placed on compliance teams, eliminating the need to chase down employees who haven’t completed one or more of their certifications.

How does it work? A well-designed technology-enabled certification platform will include:

  1. Question sets.

The questions you include on certifications should be tailored to your firm’s needs, but once you’ve designed the content, your compliance platform should allow you to modularize questionnaires, use question sets on multiple certifications, re-order sets, mix questions with data records and re-use questions. You should also have the ability to apply different question sets to different groups and to assign monitoring tasks to different individuals or teams.

  • Two-way document sharing.

Many technology solutions allow the compliance department to include policies, procedures or other documents or document links inside certifications, so employees can review and attest to those documents. Your platform should also allow employees to upload documents to support their responses, for supervisory or compliance department review.

  • Branching logic.

When an employee responds to a certification question in a certain way, your compliance team may need to probe for additional information. Your compliance platform should include decision tree functionality and branching logic, which enables “yes” or “no” answers to trigger one or more additional questions. This allows you to streamline questionnaires for most employees, only requiring additional responses when warranted by an employee’s initial response.

  • Flexibility.

A flexible platform will allow your firm to schedule distribution of certifications which meet different policy or regulatory-driven timelines. In other words, your platform should allow you to define recurring quarterly certifications which automatically get sent to specific groups.

  • Escalations.

In a perfect world, certification requests are completed on time – every time. The reality is, especially in firms with large employee populations, not everyone does so. The ability to escalate or otherwise notify an employee’s supervisor of deadline issues is another benefit of a well-designed system.

  • Audit trail/archive.

A comprehensive platform will archive certifications so CCOs can prove employees’ certifications and have an audit trail to present during examinations.

No matter your brokerage firm’s size or the scope of applicable regulatory mandates, the advantages of standardizing workflows with robust technology are clear. Cost efficiency and risk reduction are immediate and obvious benefits.

Want to learn more about how compliance technology can help your firm track and complete certifications in 2023? Schedule a demo today!