What is a CCO and why Outsourcing is Better


Compliance is a critical function for any business. When it comes to financial advisory firms, it holds an even more crucial importance. Importance of compliance for broker dealers will only increase as industry regulations become more complex. 

Who is responsible for Compliance?

Every financial advisory firm is required by law to hire a CCO (chief compliance officer). It can be a full time employee or can be outsourced. A CCO is responsible for maintaining compliance within the firm and with the external elements.

Qualities of a good CCO:

A good CCO must possess a vast set of skills and abilities.
  • He/she should be highly focused and experienced because when it comes to broker dealer CCO services there is no room for error.
  • Must have excellent management abilities
  • Must be able to work independently and make quick decisions.
  • Must be accountable, adaptable, and flexible
  • Should be able to pay attention to detail and have ability to multi-task
  • Must have excellent communication skills both verbal and written

Responsibilities of a CCO:

A CCO has multiple responsibilities, as he/she will be coordinating with all the departments; marketing, finance, HR, etc. 

  • Developing and maintaining policies and procedures for the broker-dealer.
  • Designing and maintaining the compliance program for the advisory firm.
  • Reporting compliance with firm policies and supervisory procedures and regulatory requirements.
  • Execute excellent leadership and devise strategy to ensure compliance. Ability for risk management, control, and guarantee smooth operations of the firm.
  • Managing regulatory audits and exams acting as appointed SEC, FINRA and CFTC regulatory contact of the broker dealer.
  • Collaborate proactively with other departments of broker dealer, as needed to make sure compliance issues are addressed, investigated and resolved immediately.

Why outsource Broker Dealer CCO services:


CCOs are highly experienced individuals and they report directly to CEO i.e. they’re second in rank to CEO. This makes this job one of the highly paid. Bigger firms (wirehouses) have their own CCOs but it is difficult for smaller or startup firms to find such an experienced person to act their CCO. Even if they find one, paying them can be a big issue, that is why it is better for such firms to outsource compliance services. It gets the job done and doesn’t take a toll on budget.

Conclusion:

Without a CCO (permanent employee or outsourced service) FINRA and SEC won’t allow any broker dealer to operate. You have to appoint a CCO as your prime liaison to deal with SEC and FINRA whether you like it or not.

If you’re looking for experienced, professional, and economical CCO services for your broker dealer, BD Consulting Associates are one of the best.

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