Practice Management

How Financial Advisors Can Turn Compliance into a Revenue Generator


Written by Kronos Technologies on March 20, 2019

Many advisors view compliance as a source of anxiety and a drag on their efforts to grow their practice. For some, trying to keep up with the seemingly endless cycles of filing, data entry and disclosure communications can be frustrating. And, while advisors understand that compliance regulations exist for the benefit of their clients, many feel that the work involved in maintaining compliance takes time away from actually uncovering and fulfilling client needs.
That’s one way of looking at compliance—but the best advisors see it as a growth opportunity. Read on to see how achieving and maintaining compliance can be a revenue generator for your practice.

4 ways compliance can generate advisor revenue

Compliance regulations can differ from one jurisdiction or company to the next—but, generally speaking, all compliance rules cover a few important principles of client care: record retention, advisor disclosure, client privacy and demonstrating a needs-based approach to selling.

Record retention

To maintain compliance, client records, advisor financials, and many other key documents must be preserved and made available for audit if needed. In the old days this meant filing and storing a lot of paper, which was time-consuming and costly—and brought with it the attendant worries of not being able to find documents once they’d been filed, or actual document loss or damage.  

Today, record retention is much easier. Advisor-specific CRMs and integrated FNA tools enable advisors to automatically attach documents to the relevant client records, where they can easily be found when needed. This saves admin time, effort and cost—and it also creates opportunities to build great client experiences. Stored client records and documents can be reviewed prior to each new client interaction, reminding the advisor what work has already been done with a client, and what opportunities still exist. Good record retention, and easy access to data, make it possible for advisors to provide better client service—improving relationships and increasing the lifetime value of clients.

Advisor Disclosure

Advisor disclosure isn’t just a regulatory requirement—it’s a fundamental method of building client trust. Disclosing your relationships with the companies you work with, and being clear about your fees is a good way to increase client’s confidence that you are working with their best interests at heart. And, that makes it a great revenue generator over the course of a client relationship. 

Disclosure discussions are a good opportunity to demonstrate to your clients the value of the work you do for them, and how that relates to the fees that are charged. These types of conversations are likely to reduce anxiety clients may have felt around how you work and where your allegiances lie. They show you are transparent in your dealings with them. Disclosure increases client confidence which makes clients more likely to adopt your recommendations and buy from you.

Client privacy

Your clients’ personal and financial information is a hot-button issue for them—especially at a time when scams and data breaches are making headlines on a regular basis. Consumer anxiety about the safety of their data is high and is a critical factor in the decision-making process when it comes to choosing who they will work with. 

All advisors know it is important to follow client data privacy rules and guidelines, but the best advisors turn their efforts to secure their clients’ data into a competitive advantage. They develop policies and procedures in their practices for how they will handle client data. They find the right technologies—for CRM, Accounting, Email or any aspect of their workflow—to ensure that data is protected. Then they find the best ways to communicate to their clients exactly what they are doing. The message may be delivered through short seminars on protecting your personal information, or a series of emails or blog posts. Or, it could be one-page marketing materials that graphically illustrate the highlights of the advisor’s data privacy policies, and how they benefit the client.
No matter what combination of communications an advisor chooses, the key is to promote your protection efforts. Becoming a champion of client data privacy will set you apart from your competitors, increase client confidence and deepen your relationships.

Needs-based approach to sales

The foundation of all compliant sales practices is to focus on uncovering and meeting client needs. This approach is also the most powerful compliance-related revenue generator. Always taking a needs-based approach to your client interactions will ensure that you are not pushing product. It keeps the focus on the client, demonstrating empathy and building client trust and confidence. And, most importantly, it reveals the hopes and fears your clients have about their future—the prime motivators that will cause them to act on your product and service recommendations over the course of your relationship.

Top advisors ensure their needs-based approach is optimized and that they capitalize on all the opportunities it will generate by making sure to conduct regular client review meetings with their top clients. They use the best FNA software to ensure all needs are uncovered in the most efficient manner. And they use an advisor-specific CRM that integrates with their FNA tool to manage review meetings, follow-up and all future cross-sell and up-sell activities.

Wrap up

Compliance is more than just a regulatory headache—it benefits customers, and can become an engine of growth for advisors. Record retention within a good CRM solution gives advisors instant access to the data they need to better serve their clients. Advisor disclosure builds trust and deepens client relationships. Championing client data privacy can provide advisors with an edge over their competitors. And, taking a needs-based approach to sales increases the number of opportunities advisors have to cross-sell and up-sell. Re-framing compliance as a revenue generator rather than a cost centre enables advisors to create awesome client experiences and grow their practices, while respecting the rights of their clients.


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