Chris Davies: Business v compliance risk - interrelated but different

Adopt a universal approach

clock • 4 min read

Recognising business and compliance risks are interrelated and thus using appropriate strategies to manage them is crucial in the financial services sector, writes Chris Davies

One of the biggest risks we see retail intermediary advisers (RIAs) make is confusing business and compliance risk. Recommending a product deemed suitable to meet current client needs, for example, does not make it a good risk when viewed from a business legacy viewpoint. That is because client circumstances change, which means their perceptions change and thus their trust and informed consent is at risk if they are not serviced correctly. In turn, lost trust and complaints become a business risk via fines and damaged reputation or worse. With regulations on the increase and the need ...

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