Creativity vs. Compliance: When Marketing Just Doesn’t Seem to Get It

We’ve all been there before…you get a request to review marketing materials, and there’s urgency to it. Great! You’ve successfully trained the firm to make sure things are run by you first. The problem is it’s 4:15pm and they need to get it out by the end of the day. You open up the document, see some unsupported performance numbers, maybe a testimonial or two, and some language that’s so flowery that even a botanist would blush. The author is really excited about the piece, which pretty much guarantees (and we all know how much we hate that word) it’s not compliant. What’s a CCO to do?

Well first, take a deep breath. Then work through the document by prioritizing your comments. What’s a no-go? What’s just a preference? How do your findings compare to recent SEC Risk Alerts or Exam Priorities? Take the entirety of your comments back to the author and use them as bargaining chips. “I really don’t care for the way this is worded, but I can live with it. But the claim that our models will outperform the benchmark by at least 15% for the foreseeable future? That’s gotta go.”

Notice the wording used above; there are no “you” statements and the use of “our.” Positioning yourself on the same side of the table (you do, by the way, work for the same firm) helps take out some of the traditional “you vs. me” or “us vs. them” conflict that tends to pop up when Marketing and Compliance get together.

I’d argue, however, that you should do as much as you can beforehand to prevent this from happening. Here are some steps to help prevent this fire drill:

Establish a Defined Review Process

We all know that marketing materials need to be reviewed by Compliance prior to distribution, so why not put some parameters around that? Whether it’s through e-mail, a workflow through your CRM, or even reviews of physical pieces of paper, make sure everyone knows what needs to happen. An important part of this is timing as well. We all want to have as quick a turnaround as possible, but establish minimums to say you need X amount of time to do a proper review. X in this case is likely more than 20 minutes.

Make Friends with Marketing

While Compliance and Marketing at times can get along like the Starks and Lannisters in Game of Thrones (RIP to the Lannister legacy), I’d argue that Marketing can and should be one of your closest allies. Go to lunch together! Stop by when you don’t need anything to just see how they’re doing. Make sure they’re up to speed on not only regulatory hot-button items, but also on the basics. What counts as testimonials? When is performance allowed and when is it not? Where do disclosures go? Most compliance issues can be worked out before they even cross a CCO’s desk with an educated and friendly Marketing group.

Make your ‘Nos’ Matter

No one likes to hear no all the time, but yet sometimes Compliance can be viewed as the “No Department.” In your daily reviews, make sure that you very rarely just flat-out say no to something. Try to explain why there’s an issue, and then suggest alternatives. Even if they don’t particularly like or even use your suggestion, at least you’re making an effort. Then, when you do have to say “no” to something, that should jump out as important…as different from other items you’ve identified.

But at the end of the day, you’re only one man or woman, fighting the good Compliance fight. If Senior Management makes the decision to overrule you, at least try to soften the wording some. Be willing to compromise, and try come up with reasons why the material actually is compliant. The regulatory world surrounding marketing is often murky and up for interpretation, so there are usually two sides to an argument. Even if your side doesn’t win out, try to come up with some sort of thought process should it come up in an examination. And remember, Starks, Lannisters, Dothraki and Unsullied all fought together against the Night King. If Jon Snow and Jamie Lannister can fight together side-by-side, Compliance and Marketing can, too.

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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

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