The last year has not been a particularly easy one for brokers. Increasing costs associated with regulatory compliance, lack of volatility in the markets, falling revenues, tighter margins and now, on top of all of that, the impacts of COVID-19, are taking their toll.
Whilst the huge increase in Volatility in the last month has helped the bottom line of many firms there have been some huge societal changes to which we have had to adapt in that firms have had to move from an office-based environment, with some remote working, to the new norm of entire firms working from home (WFH).
This presents challenges for many firms, irrespective of which sector in which they work, and our sympathies of course go out to those firms and employees that do not have the luxury of being able to operate in such a way.
Within our world there are however many operational and legal requirements that add to the burden of operating in this kind of environment. A huge part of this is the adjustment that many firms in our industry have had to make in order to ensure that they are fulfilling both their internal compliance policies, as well as their regulatory responsibilities.
As IS Risk Analytics and IS Prime have had experience working with many different types of business of all sizes across the globe, we thought it would be useful to share some of the experiences we have had both within our own firm and working with our clients, technology providers, and contacts in the market.
- Communication: In the current environment, communication is key. In fact it is better to over-communicate rather than under-communicate and it is advisable to touch base regularly with colleagues and clients. Decide which communications channels work best for you – whether phone, dedicated slack channels, email, or other messaging systems – and work with your colleagues and teams to ensure you are all able to collaborate effectively and efficiently, particularly when dealing with clients. No longer are we able to yell across a desk so ensuring that tasks are not missed needs careful monitoring.
- Compliance: With so many WFH, monitoring people’s activities is likely to be more difficult, so ensure your compliance policies are updated to reflect the challenges faced, from the simple submission of expenses forms to the recording of client calls.
- Legal/Regulatory: Keep up to date on the changing regulatory rules. There have been differing responses from regulators, with FINRA indicating that it will relax some rules for traders could WFH, as long as their employers can demonstrate adequate supervision and oversight. Latest FCA advice can be found at https://www.fca.org.uk/firms/information-firms-coronavirus-covid-19-response
- Technology: By now, many people will have already sorted out their WFH technology, with keyboards, screens and other peripherals often borrowed from their offices, but the most important factor is ensuring that you are able to have continued access to your technology providers, servers and systems.
- Risk management: In such volatile times, it is vital that you manage your risk effectively, whether that is market risk, liquidity risk or counterparty. You need to absolutely ensure your counterparty is reliable at all times, but now is more important than ever.
- Workflow & wellbeing: Robert Buxton, one of the members of the IS Prime London team, recently wrote an article on LinkedIn entitled “Working from home: advice for the newly initiated”, providing some very useful advice for anyone WFH. In his article, Robert talks about why it is important to maintain regular hours, set some ground rules, schedule breaks, set up a dedicated workspace, socialise with colleagues, communicate regularly, exercise, be positive and start and end the working day with a set routine.
In conclusion, while there are a number of challenges that firms face in the current environment, with the right approach, these challenges can not only be overcome but could instigate long-term changes to how we all work in the future. Getting things right early on will no doubt provide clear benefits in the long run.