Be ready for the regulator

By Mark Ziebarth | August 15, 2011 | Last updated on August 15, 2011
3 min read

Are you ready for a branch audit? Whether you are awaiting a visit by your compliance officer, an internal audit or an IIROC/MFDA check-up, here are six tips for preparing for a review:

1. Know your firm’s key supervisory policies and where you can access them

You will likely be quizzed about certain policies and procedures. If updates have been issued, make sure you are aware of your most current requirements. If you are an MFDA branch manager, read Policy 5, available at It’s the minimum standard guideline for branch review procedures for the Mutual Fund Dealers Association of Canada. Your firm may have more stringent guidelines, but at least should be following these minimums.

2. Maintain a marketing and advertising approval file

Do you know which advisors in your office are active with seminars, telemarketing, print advertising, fax casting, websites or social media? Ensure that materials have been reviewed, whether through advance approval or retained for random post-use approval, according to your firm’s policies. Retention is critical so you must know where approved drafts/final copies are filed. Be sure to keep a “social media” file containing printouts of approval emails and other evidence that the content has been reviewed.

3. Conduct outstanding documentation clean-up

If your branch has a lengthy list of outstanding documentation, make it a project to slash that list to almost nothing before your review. Provide incentives for your advisors and assistants to get rid of old problem paperwork.

4. Safeguard information and client assets

Is private information inaccessible to public visitors? Are client files secured nightly? Where are deposits from clients kept before physically banking them? Are blank cheques secured? How are any incoming securities safeguarded until shipping out? Ensure your branch has strong controls in this area.

5. Keep evidence of your supervision

What records, reports, initials, spreadsheets or other proof do you have that you performed certain supervisory tasks? Do you know where they are kept? Doing the supervision is not enough. You must retain evidence that you did the supervision and did the follow-up.

6. Follow up supervision

Do you retain emails or notes when you have investigated something with an advisor? Where are they? What is your follow-up system to ensure items get resolved to your satisfaction? Questioning a transaction now, and following through, may save potential complaints and suitability claims later. As branch manager, you are likely the designated supervisor for your office and are responsible for at least a certain level of supervision of your advisors’ activities. Know what your responsibilities are. They should be documented to you by your firm. A strong follow-up system can prevent significant problems and will show to the reviewer that you are a competent supervisor.

As branch manager, you play an integral role in the firm in the protection of your advisors, and clients, from oversights or potential misjudgments. Know that simple internal controls and supervisory evidence will go a long way to helping you breeze through a review.

For more information on this topic and to learn more about compliance, training and practice-building tools and services, visit

Mark Ziebarth