Written by: By John Toepfer, CEO, Synthesis Technology & Stephen Pope, CEO, Red Oak Compliance Solutions
Asset managers need to get content like factsheets and pitchbooks in the hands of consultants, advisors and investors faster than their competition. Even firms who use content automation are finding that speed-to-market can be derailed due to inefficient compliance review processes.
The most frequent reason for this problem is that many small asset managers don’t have a dedicated marketing review team or formal review processes and the larger firms often struggle with timely reviews and process efficiency issues. In some firms, the Chief Compliance Officer or in-house attorney also handles day to day marketing content reviews. In other firms, reviews are conducted via email, rather than through a dedicated review application. Many firms don’t even have a formalized process for complying with SEC Rule 17(a)-4. This rule specifies what asset managers and broker/dealers must do to preserve ”true books and records,” including guidelines for maintaining permanent electronic records and audit trails of content reviews in non-erasable or modifiable formats that can easily be searched and accessed. Compliance with 17(a)-4 is not something that is achievable using email boxes, or simple workflow tools that don’t understand this form of recordkeeping.
We find that even when asset managers have fully defined review processes and systems, these safeguards are often bypassed. One of the most common situations occurs when institutional salespeople patch together pitchbooks from pre-existing sales decks and present them to prospects without submitting them for review first.
All of these “compliance leaks” can create huge legal and reputational risks if and when FINRA, the SEC or state regulators require an audit of your firm’s marketing review processes. Or, even worse, if a prospect or client sues your firm for using outdated, inaccurate, or noncompliant materials.
If any of these issues sounds familiar, it may be time to re-engineer your marketing content review processes and compliance requirements. From standardizing workflows to employing technologies that minimize human errors, there are many ways you can remove compliance bottlenecks.
Rethinking Compliance Workflows
The first step toward improving the accuracy and time-to-market is create or rethink your workflows. Ideally, they should define what happens at each step of the review process and who is responsible for completing each task.
But even if you button down one reliable workflow, it may actually create more work than is really necessary, given the kinds of content your firm creates. That’s why savvy firms create multiple workflows to reflect the nature and complexity of different kinds of marketing deliverables.
For example, the most labor-intensive, multi-step reviews involving business line, Compliance and legal stakeholders may be reserved for brand new content, such as a whitepaper or fund commentary that starts off as a Word document and finishes as a fully designed printed piece or PDF.
Conversely, fast-track workflows may be employed for reviews of materials incorporating previously approved content, such as a customized pitchbook a salesperson assembles from a master slide deck.
A word to the wise: the content creator should never have to choose the workflow. Instead, use a standard submission form that contains user-selectable inputs. This enables a review-traffic manager to route it correctly. Inputs might include: the format of the submitted content (Word document, PowerPoint presentation, PDF, script, web content, social media post, etc.), whether it is original or based on preexisting content; the intended general audience (client or prospect), any specific audience segments (consultants, investment advisers, brokers, retail investors, etc.), the locations where the content will be used; the kinds of products or accounts mentioned in the piece; or anything else that can help ensure that the submission is directed to the appropriate workflow.
Improve Disclosure Management
Workflows alone can’t solve the problem.
Many firms have inefficient disclosure management processes that lead to multiple rounds of revision. Marketing pieces can get sent back and forth like a ping pong ball when the wrong disclosures or noncompliant language and imagery are used.
But content producers can’t be expected to keep track of the potentially dozens of different disclosures that may be required for a particular piece. So, Compliance alone needs to be the steward of these standards and communicate them to content creators and submitters. There’s also technology that can help.
Several asset managers we’ve spoken to try to automate disclosure usage. Some create Word, Excel and PowerPoint macros that writers and designers can select to insert required disclosures on a page. Others create standardized, pre-approved sales presentation libraries with disclosures already embedded on each page from which a salesperson can create a customized pitchbook.
The problem with these do-it-yourself approaches is that when disclosures need to be added or changed, IT departments may have to manually reinstall updated macros on every content creator’s computer, a difficult challenge that can become a logistical quagmire if many employees are working remotely. Even standardized sales libraries can become compliance Trojan horses if salespeople aren’t checking to see if these libraries have been updated and end up using outdated versions to create their pitchbooks. Solutions that were supposed to minimize human errors can end up increasing them.
That’s why a growing number of asset managers are turning to integrated content automation and compliance review applications that can get these deliverables to market faster while minimizing the potential for human errors.
Content automation applications collect performance information, marketing language, disclosures and other static and dynamic data from a variety of sources and store it in a centralized, secure repository.
This centralized data can then be mapped into pre-designed and compliance-approved templates for pitchbooks, fact sheets, brochures, shareholder reports and other sales and marketing materials. Instead of cutting and pasting data from performance spreadsheets or relying on memory for which disclosures go where; the application automatically does the work.
Some tools incorporate a firm’s business and compliance requirements directly into the content creation process. For example, they’ll import the correct disclosures for one version of a pitchbook aimed at consultants and another created for retail investors. Or add share class-specific fee disclosures for fund fact sheets with multiple share classes.
Some can even execute “if/then” scenarios. For example, if a user selects a particular slide from a sales library that also requires another to be used (or an additional disclosure to be added at the end), these tools can automatically incorporate this additional content into the generated document.
As long as the data in the central repository is accurate and current, both marketing and compliance can feel confident in the materials generated by these content automation tools.
“Smart” Compliance Reviews
At the minimum, marketing content review software should: employ one or more workflows for submitting, reviewing, revising and approving sales and marketing content; document each step of each individual review; and archive all review records and submitted materials in a manner that fully complies with the requirements of SEC Rule 17(a)-4 and makes it easy for regulators and auditors to access them.
In addition, new innovative compliance platforms are using machine intelligence to give firms greater flexibility for creating and executing multiple workflows and can keep noncompliant content from entering the review queue.
The software does this by storing the firm’s disclosures and language requirements and leveraging them to conduct “smart” pre-submission reviews. It uses sophisticated natural language algorithms to identify instances in a document where noncompliant phrases are used or where specific disclosures need to be added or corrected. These “pre-reviews” enable the content owner to go back and correct these issues before formally submitting them for review.
The software is configured to automatically route submissions through one of many possible review workflows. For example, a firm might use one expedited workflow for reviews of pitchbooks created from pre-approved sales libraries, and a more rigorous, multi-step workflow for original content. The software is smart enough to “choose” the workflow based on the inputs a submitter makes when filling out the review form.
These applications can aid in compliance documentation, several review applications can generate customizable compliance codes and insert them into approved documents. Records can be stored on a local or remote server or on the Cloud, and powerful search features make it easy for anyone from marketing teams to regulators to locate a single submission—or several years’ worth.
Integrating Content and Review Automation: The Best of Both Worlds
For firms that produce a high volume of pitchbooks, fact sheets, product brochures, shareholder reports and other sales and marketing materials, integrating content automation and smart review tools can result in a time-and-cost-efficient end-to-end marketing production and distribution solution.
The key is making sure that these tools can communicate with each other seamlessly. This enables marketing managers or salespeople to automatically produce a client-ready pitchbook or fact sheet incorporating the most updated performance information, approved language and required disclosures and then instantly submit it for review. In many cases, this creation and submission process can be completed in minutes.
No doubt your asset management firm has outstanding people in marketing, sales, and compliance who are strongly committed to helping your firm win new business and reduce compliance risks. With the right technology, you can reduce manual steps and inefficiencies in your processes and improve your competitive edge.