Managing Training for Regulation Best Interest with GRACE


Training is an important aspect of Reg BI – La Meer’s GRACE platform can make sure you are covered

The SEC’s latest regulation, the Regulation Best Interest (Reg BI) is now in effect, with firms having had to bring their operations into compliance from June 30, 2020, and SEC examination notices now going out. 

In this short article we will focus on the requirements for providing comprehensive training to all staff and associated persons to meet the Reg BI expectations, and, of course, how La Meer’s GRACE platform enables you to demonstrate your adherence to this, and with our full solution for RegBI, and all of the regulation requirements.

As a short reminder, Reg BI mandates four Compliance Obligations:

  • Disclosure Obligation: required before, and at the time of recommendation acceptance, and if there are any changes in conditions due to new conflicts or changes.
  • Duty of Care Obligation: the exercising reasonable due diligence, care and skill in making recommendations.
  • Conflict of interest Obligation: establishing policies and procedures to identify and address conflict of interest.
  • Compliance Obligation: establishing policies and procedure to monitor compliance with Reg BI.

How can we ensure all your Staff and Associated Persons are trained on your new organizational processes for Reg BI compliance?

Reg BI demands that the policies and procedures of the organization provide explicit guidance to the organization and associated persons who are involved in the sales process adhere to their client obligations of acting in their client’s best interest.

The organization needs to have implemented a variety of compliance and oversight processes to ensure that the processes are being followed. These cover product selection, client risk profile creation and assessment, product recommendation/suitability oversight, disclosures management, conflicts management (and their inclusion into disclosures where necessary), portfolio reviews and trade monitoring to ensure suitable products are being used in the actual portfolios.

SEC, FINRA have indicated a special focus on monitoring that adequate training is being provided to staff and associated persons.  Given the ongoing COVID situation, online training is an effective way to allow them to be trained from where ever they are.  It is necessary, however, to have training which is customized to the particular firm’s internally defined process, rather than simply following a generic online training course.

Compliance staff, of course, need to know, understand and be able to execute their new compliance processes – this means specific training for compliance staff.

Records need to be kept of who has been trained, what training they undertook, that they actually understand the material and that they attest to following the new processes.

How do we use GRACE Training to address the need?

GRACE Training provides a complete solution for deploying online training to staff, whether they be remote or in their normal office situation.  By including training in the regulatory compliance platform we are able to assign training, monitor participation, test for understanding and record attestations all in one place.  Reporting and alerting on gaps ensures that no one is missed. When it comes to examination time it is easy for the organization to demonstrate that everyone knows what they need to know to operate in the client’s best interest.

Users and user groups can be set up using a simple to use, web-based function. Customized training material can be loaded into the system.  Training courses can be assigned to user groups allowing for different sets of training for each group in order to meet their specific functional roles and responsibilities.

Basic, intermediate and advanced training levels can be set up to classify training materials for each department or user group. Questions and online testing can be set up after each lesson to assess the individual’s understanding, and where necessary, lessons can be be repeated to ensure the nuances are well understood. 

Training modules are interactive, can have voice over commentary options, as well as written and visual content.

End users get reminded of the training that they need undertake, at the click of a button the courseware is available for them to complete at their own pace.

The scores from the training are available to allow analysis of the impact of the training, and to ensure that the training material is effective in conveying the specific understanding of the processes.

Users can be move from their basic training to higher levels based on their scores in testing and understanding of each level.

Training calendars ensure that training is not just a one time exercise, but that periodic training requirements are met, sending out reminders for the staff to undertake them as they become required.

The training dashboard provides a comprehensive view of all training and their status, as well as of the associated persons and the level of training that they have completed, along with their scores. Dashboards can be a valuable tool in ensuring that everyone in the organization gets trained effectively.

Benefits of our approach

  • The easy web-based, comprehensive, training functionality available to associated persons, client management staff, and compliance staff, across multiple branches and locations, can help instill the knowledge of the appropriate Reg BI processes that they need to be aware of, and use, in their day-to-day interactions with clients and colleagues.
  • By enabling all the functions in a web-, tablet-, mobile-enabled system, GRACE allows all associated persons and staff to be trained, and allows the firm to monitor their understanding of expectations.
  • Providing the right training at all levels ensures managing conduct risk, and helps you stand in good stead for compliance examinations.
  • With easy to use dashboards, management have a clear and accurate view on all the training statuses.
  • Additional training to address compliance violations or changing requirements, can be released as needed, based on the supervision and oversight deviations and violations that compliance management group observes.

GRACE has everything you need in one place

La Meer’s GRACE platform has all the functionality you need to create, review, manage, approve and distribute disclosures required by the Regulation Best Interest, keeping an audit trail that all actions were correctly carried out.

Regulatory examinations are easily taken care of when all the required information is in one place, and a firm can demonstrate that it has taken its obligations seriously and really is acting in the best interests of its clients!

GRACE for Regulation Best Interest

Whatever stage you are at with your Regulation Best Interest implementation, the GRACE for Regulation Best Interest solution can help you.  We cover all key areas:

  • Form CRS And Disclosures Management
  • Policies and Procedures, Attestation and Training
  • Client Relationship and Recommendations Management
  • Client Portal
  • Client Risk Profile Management and Classification
  • Product Suitability and Governance
  • Portfolio Oversight Management
  • Advisor and Registered Rep Supervision
  • Conflicts of Interest Monitoring
  • Disclosures Management

The modular nature of the GRACE platform allows our clients to implement (and pay for) only the modules or functionality they need, so if you are having a challenge with one particular area of the regulation we can help, and quickly add the next pieces when you are ready without the need for additional vendors or integration costs.  The GRACE platform is 21st century technology, cloud-based, web, tablet and mobile-enabled allowing advisors, clients and compliance officers to interact whenever and wherever they are – essential in working from home or with a distributed workforce.  The solution is intuitive and easy to use, empowering staff to work in a compliant way, without unnecessary or complex overheads.

If you are working on your whole solution for day two and beyond we would be like to speak with you to understand the challenges you are having, and to discuss with you how GRACE might help you in easing your Regulation Best Interest demands.