Investment Management Best Practices

Supplement "In-Person" Advice With Multiple Communication Channels to Improve Customer Experience

Best Practice (Good)

Offer customers the ability to use multiple communication channels (telephone, email, mobile, online portals, video-conferencing, Skype, etc.) to research financial information and advice while optimizing a mix of in-person interactions to handle complex problems or important family events. Ensure that customers are aware of the communication channels (such information is typically provided within the bank’s or investment management’s online portal, emails, etc.) available to them as early as possible to improve customer experience and allow financial advisers to have more time to handle complex tasks.

Typical Practice (Bad)

Insist on providing customers only with in-person interactions in order to provide them with financial advice and information. This not only reduces the potential for errors and misunderstandings from occurring, but the knowledge that the bank and/or investment management institution is looking after the customer increases overall customer trust and satisfaction.

---

Benefits:

Expectations of investors vary depending on various demographics (age, gender, sources and amount of income, etc.), from outperforming market indices to meeting financial goals, irrespective of market performance. Such varying investor expectations not only influence the kinds of products, advice and services desired, but they also influence the expectations surrounding communication preferences. Furthermore, since maintaining strong interpersonal customer relationships remains crucial, financial advisers should provide customers the option to use multiple channels of communication (e.g., telephone, email, mobile, internet, video-conferences, Skype, etc.) to deliver new services to clients while optimizing a mix of "in-person" interactions to deliver advice. Ensure that customers are aware of the communication channels (such information should be provided in clear and understandable language within the bank’s or investment management institution’s online portal, emails, etc.) available to them as early as possible and make sure that all communication channels insist on the use of in-person interactions when dealing with complex problems or important family events. This not only allows customers to obtain information and financial advice in a method that is convenient and easily accessible (thus allowing financial advisors to focus on more complicated tasks), but by mixing in in-person interactions when a complex problem or important family event pops up, financial advisers are able to both reduce potential errors or misunderstandings and increase customer satisfaction levels.

Implement Proactive Fraud Management Prevention Educational Programs to Reduce Exposure to Regulatory Risk

Best Practice (Good)

Implement proactive KYC, AML and Customer Due Diligence programs that ensure that the bank or investment management institution is not only compliant with fraud prevention training requirements, but are also highly knowledgeable on fraud prevention issues and implement fraud prevention protocols into routine work operations. Utilize fraud prevention educational courses/meetings regularly to assess changes in industry landscape, current events that may influence fraud prevention practices, potential changes to regulations, etc. Perform internal audits regularly (typically monthly or quarterly) to assess the bank’s or investment management institution’s compliance with fraud prevention protocols.

Typical Practice (Bad)

Have employees undergo KYC, AML and Customer Due Diligence training as required by regulatory authorities. Set standard timelines for employees to complete fraud prevention training and monitor a checklist to ensure that employees have completed all required training courses and certifications. Training is performed when new employees are hired or when regulatory authorities implement changes that require additional training.

---

Benefits:

Proactive fraud management and prevention education reduces the bank’s or investment management institution’s exposure to regulatory and reputational risk. Employees who know how to analyze customer identities, determine and assess customer risk profiles, and detect suspicious transactional behavior will reduce the instances in fraud and boost overall customer confidence in the bank or investment management institution.

Periodically Train Internal Trading Teams on Data Governance Policies to Ensure Compliance

Best Practice (Good)

Work with the bank’s and/or investment management institution’s IT and Master Data Management departments to periodically train internal trading teams on the bank’s or investment management institution’s data governance policies and processes, especially those governing the storage of customer information and documentation, so as to ensure employee understanding and compliance. Supplement periodic training programs with meetings and various reference materials (physical or online based) to increase the data literacy of internal trading teams and ensure they are kept up-to-date on any policy or procedural updates. Use a validated entry system (drop down menus, standardized responses, acknowledgement of data submissions, etc.) to ensure all required information is captured and submitted in the same format. These practices not only ensure that all internal trading teams working within the Back Office Operations function are able to store data from customer submissions without error, but it also makes sure that the employees themselves are able to keep and maintain accurate customer data and documentation.

Typical Practice (Bad)

Train internal trading teams on complying with bank and/or investment management institution data governance policies upon being hired to quickly bring them up to speed with what is expected. Provide internal trading teams easy access to physical (manuals, brochures, etc.) and online resources for them to refer back to. It is the responsibility of the internal trading team to understand and comply with institutional data governance policies to ensure all customer information and documents are stored without error.

---

Benefits:

To ensure internal trading standardization concerning data governance (the overall management of the availability, usability, integrity and security of a company’s data), internal trading teams must not only understand the bank’s and/or investment management institution’s data governance policies and processes, but they also need to know how to efficiently comply with those policies. In this regard, periodic training increases the data literacy of all internal trading teams. Meetings and easily assessable reference materials (both physical and online resources typically located within the Intranet) should therefore focus on teaching internal trading teams how to properly use the data storage systems in use, how to correctly identify missing and or incorrect information and/or documentation, etc. A validated entry system (drop down menus, standardized responses, acknowledgement of data submission, etc.), furthermore, ensures that all entered data is submitted in the same format, thus reducing further instances of errors and/or missing documentation.