WM Sales Practices & Suitability Surveillance

The Requirement 

A US based global wealth manager wanted to implement a vendor solution to monitor and provide coverage for sales practice issues to meet its current and future global regulatory requirements and ensure investment recommendations are consistent with each client’s investment objectives and suitability profiles. 

The Solutions 

Risk Coverage Assessment 

RegEdge undertook a detailed inventory of risks that the firm is exposed to based on the nature of the wealth management business by working closely with stakeholders from business, supervision and compliance. For each of identified risk, we worked with the stakeholders to provide detailed requirements of the controls needed to meet regulatory expectations for the oversight of sales and suitability practices.  

We then assessed the availability of out-of-the box models offered by vendors, along with identifying custom models that would provide coverage for all requirements. 

Data Analysis and Requirements 

RegEdge performed the data analysis by working with client's wealth management custodian partner and the vendor to translate and map the data requirements required for each of the models. For each model, we determined the inclusion and exclusion rules, business logic and performed tuning to identify an initial threshold to be configured for the solution. 

Implementation, Testing and Rollout 

RegEdge provided end-to-end analysis and project management for the implementation of the vendor by coordinating with the vendor and accurately translating the requirements into the technology solution, performing alert tuning to right-size the thresholds, and testing to ensure that the results are as expected until the production rollout. RegEdge supplemented the vendor solution by building additional bespoke solutions to augment the risks not covered as part of the solution, by building surveillance reports, surveillance dashboards and operational metrics dashboards.  

The Results and Benefits 

This work allowed our client to completely automate the controls and processes required to monitor sales practices and investment suitability requirements while meeting regulatory obligations. There was a significant improvement in effectiveness of the supervisory review process, and reduction in manual efforts, translating to improved response times. The implementation of enhanced supervision controls allowed the business to focus their resources on future growth.