GRACE - Client Management

The Fiduciary Rule in the US and the MiFID II regulation in Europe are addressing similar themes – that of consumer protection and ensuring that the Advisors and Asset Managers to ensure that clients get financial advice that will protect their best interests.

La Meer Inc. has recently released GRACE for Client Management to address the market needs from these regulatory expectations The following are the expectations from the Fiduciary rule as well as MiFID II regulations

Client Side requirements:

  • Build a robust client classification and related client data repository

  • Offer enhanced client portal allowing the clients to see their transactions, positions and portfolios a well as fees and other transactional costs as well as for interaction with the Advisor/investment management staff

  • Manage trading activities to ensure best execution

  • Offering trade and price transparency to clients

  • Conduct additional client outreaches and disclosures

  • Have an Integrated Client Data – Books and records for internal audit, compliance and regulators

Compliance requirements:

  • Keep track of Inducements and Commission

  • Manage Product Governance to keep track of product characteristics and their suitability for specific risk profiles

  • Product Intervention in case product is found unsuitable for certain sections of clients.

  • Monitor Customer Reporting

  • Keep track of Client Risk profile classification

  • Ensure Suitability and Appropriateness

  • Monitor Complex Products and their usage

  • Keep track of Electronic Communications

GRACE has been created to help the client facing advisors and investment personal / registered representatives and internal compliance management staff to have an integrated approach to Client Management, seamlessly integrated to compliance and clients to offer maximum operational efficiency, ensure compliance, and provide books and records that adhere to all the regulatory compliance requirements of DOL, Product Suitability, DOL, Anti-Money Laundering provisions of the BSA/AML, Market Disclosure, Fees and Billing, Annual Client Portfolio Reviews and other requirements of Client Compliance Management in an efficient and effective manner.

GRACE is a web based SaaS model solution that provides a secure and efficient way for both the front office as well as the compliance staff work in collaboration to achieve the goal of effective compliance and client management process through its comprehensive set of functions GRACE provides a single repository of information that can be easily retrieved for audit purposes. The SaaS model nature of GRACE- can help you as a customer to start your Compliance Monitoring program as soon as you sign up without having to create any hardware infrastructure.

  • The Compliance Team can audit , review and classify the current clients based on their current AUM, products they use, whether they are fee based / commission based and other criteria.

  • Compliance can define criteria based on account size, household, tactical option to pursue for household, any client/account exceptions, asset that’s causing prohibited transaction and other issues.

  • Compliance can also manage the process of communication to the advisor and advisor to the client through calendaring and followup mechanisms

  • GRACE also offers the tablet enabled Advisor Portal, so advisors can carry the data that is needed with them to their meetings with clients, record notes on discussions and send them for review to Compliance and Legal to generate the right kind of portfolio to meet the clients expectations. Alerts for due dates for calendar events will be automatically generated.

  • Compliance can have a dashboard for Advisors and their client statuses to ensure that all clients have been taken care of and appropriate actions have been concluded.

  • GRACE’s standard processes for Client Suitability review, Account Opening, Client Transaction Monitoring, Portfolio Analysis, Fees and Billing information, Client Complaints, Annual reviews and AML monitoring make it a very comprehensive tool for not only regulations management but also for efficient Client Management for the long term.

Be able to verify compliance activity in an organized and integrated way to see risk trends early

Be ready for SEC Audits at all times and meet the SEC requirements for compliance

Be operationally efficient in compliance management by consolidation of all evidence information

centrally. Having them spread out in multiple excel files, documents and paper trails makes the process inefficient and labor intensive to retrieve and produce it for audit

Help senior management be confident that they are conforming to their fiduciary duties

Implement best practices in compliance and oversight management

Have integrated view of all compliance activities in the organization

Reduce time spent, and costs in the compliance management process

Provides significant cost savings on the firm to prove compliance

Reduces compliance issues and monitors issue management to closure

Early identification and control reduces cost of mitigation

Be able to search and retrieve information with least time and cost for audits and assessments

Have better internal control, regulatory compliance & enhanced predictability

Build ownership, responsibility and accountability for compliance and its management

Institutionalize the compliance management process

Own the knowledge in the enterprise and not lose it when key people leave

Demonstrates the culture of compliance to regulators and investors

Advisor Portal for Client Management

Provides contact management functions to connect with prospects / clients and record conversations and notes.

Provides functions to record information on Client risk profile, products being offered, model portfolio, demographics, assets and liabilities, funding needs and objectives of investments, fees and billing , custodian and referral information

Provides workflow functions for sending request for Suitability Review to Compliance Management team

Send request for account opening to Back office team for Account Opening

Provides a safe and secure system for managing Client Documents and contracts

Ability to send to clients disclosure documents that need to be sent and ensure they are received.

Report Outside Business Activities, Gifts, Political Donations , Expenses to Compliance through online forms

Dashboard to see their own Client Information, current portfolio, documents, transactions and see trends.

Compliance Management

Set up Guidelines and Restrictions
Client types Standard Checklists, Trade Security Restrictions, Fees and Billing structures, Product restrictions and other standards

Suitability Review
The compliance team can review the client for demographic information, products being offered, model portfolio structure, fees and billing information to decide if the structuring was correct for the particular
client or not. They will be able to record their comments and approve / deny the suggestion made by Advisors. The system will send email to the Advisor as soon as the Suitability Review is completed

Client Due Diligence for Account Opening
When the client account opening request is received from the advisor, the compliance team will be provided with the checklist for that type of client. Documents and information from the verification process can
be attached and remarks entered against these checks. AML verification against Sanctions List will be automatically done and and findings recorded in the system along with the supporting documentation. Once
all the verifications are complete account opening approval / reject can be suggested by the Compliance office with comments. The system will send email to the Advisor as soon as the Account Opening Review is
complete

Manage Client Disclosures review
GRACE will be the client document repository including reviews and signoffs
Advisors can send clients BIC and other documentation that need to be shared with the clients. The Compliance team will first review all the documentation and provide the approval before these can be sent to
the clients.
Compliance can monitor any of the client documents at any time to ensure that advisors are managing the business as per the agreed contracts

Monitor Trade allocation and Best execution
Client trade feeds can automatically be received from source systems and loaded to GRACE. Based on the trade restrictions set up the trades that are in violation can be red flagged, Compliance staff can review
the red flagged transactions / red flag new transactions and mark up the issues and any action that needs to be taken. Issue Management staff can record the actions taken against the issue to bring it to closure.

Monitor Personal trades of Advisors to ensure no insider trading , front running, reverse churning
Account numbers for personal trades of advisors can be set up and data feeds can be automatically brought in. Based on the trade restrictions set up the trades that are in violation can be red flagged,
Compliance staff can review the red flagged transactions / red flag new transactions and mark up the issues and any action that needs to be taken. Issue Management staff can record the actions taken against the
issue to bring it to closure. Patterns of trading can be compared against the trades from the organization books to see if there was any trading that reflect insider trading/ front running and issues can be
recorded for monitoring as well. This will allow closer advisor monitoring for violations

Monitor Outside Business Activity and any possible linkages to transaction
Advisors can send in their Outside Business Activity information through the on-line form. Compliance officers will be able to see all the information that has been submitted by the Advisors and review them.
Automated feeds from various public sources like Business registrations, Debts, Liens, Criminal violations, and Sanctions can be received into GRACE and automated red flagging of information can be done to
create a dashboard of information on each advisor.
This will allow the compliance department to get information from other sources and identify unreported violations and take corrective action

Monitor Fees and Billing
Fees and billing information can be brought into the system on a periodic basis, to validate the transactions Vs Fees and see any patterns of transaction churns to generate fees and excessive fees can be
identified and issues record to take corrective action

AML for money transfers
Fund transfer information can be brought into the system on an automated basis and AML verification can be conducted

Conduct Annual Portfolio Reviews
Client Portfolio reviews can be conducted and deviations from the model portfolio as committed can be recognized by compliance.

Customer Complaints
Customer complaints can be received and recorded on the system and followup actions can be recorded to manage closure

Marketing Material Review
All marketing material / client documentation can be entered into the system. The workflow process can be used to record review comments and manage release. This will enable the staff to ensure they use the
latest reviewed material for their client communication

Client Portal

Clients can securely Login to the website and use the secure website to share documents with the advisors, be alerted of any new documentation, and view their portfolio, holdings summary, transactions, fees and billing statements.