Let’s help marketing departments and regulators at the same time

I don’t normally discuss other blogs, but I recently spoke with Jack Kelly, famously from ComplianceX. He reached out to me because he noticed this blog. He shared with him his ambition for his media presence and why he has been so active in social media when his primary business is in Compliance Recruiting.

This post is about Kelly’s Social Media (SoMe) mistake, and how compliance officers can learn to help marketing departments and think from the regulator’s perspective.

NOTE: this is NOT a paid post. However, I can honestly say that I’ve known about Jack Kelly for years and he is reputable. For your firm’s recruiting needs, Kelly’s Compliance Search should be among the top sources. Candidates should also flock to him.

Jack Kelly’s primary business is in recruiting compliance officers for financial institutions. He also has started doing a podcast, has a blog, and has a book. ComplianceX is the blog, Compliance Jobs is job board, but Compliance Jobs TV is on ComplianceX and many of the jobs on the Compliance Jobs is for positions Compliance Search is trying to fill. And his book is a product of what? Him as an expert? Him but published by his recruiting firm? Or is it published by his job board? See the confusion here?

He proliferates his businesses everywhere. This strategy is great for getting awareness, but does not do much else. The transaction cycle for marketing begins with awareness, but it must ultimately lead to a transaction of some sort. That’s why Facebook is a great place to get your products noticed but you would use Pinterest as a possible point of sale. His content allocation is also confusing. While much of Kelly’s material deals with recruiting, about half of what I have been exposed to does not. For this reason, I wasn’t sure if he was fully in the recruiting world anymore when I recently left my firm. I thought maybe he was really just a job board. Plus, his strategy might reach HR professionals, but it does not really reach Chief Compliance Officers. HR professionals reach out for candidates and help with the transaction but the transaction ultimately is made by CCO’s and other compliance leaders.

In order to fix this, he would have to:

  1. make a clear delineation between his media presence and his recruiting work,
  2. hone in convincing clients, firms and candidates alike, to use his recruiting services,
  3. tackle his media ambitions separately.

Convincing clients to work with him for recruiting purposes requires him to share stories about recruiting struggles and successes, his recruiting process, etc. This channel should be embedded into Compliance Search, Kelly’s recruiting firm. The job board can sit separately but does not produce media related to recruiting, which kind of makes it a company that doesn’t produce any media, but at least it wouldn’t be confusing.

Then he can pursue his media ambitions in a variety of ways. He can promote himself as a compliance recruiting expert. He can focus his ComplianceX blog on compliance related issues, opinions, etc. anything but recruiting.

This strategy presents his value proposition in three or four products. Each product targets different needs.

If you work for a small firm where everyone is essentially part of the marketing department, this delineation strategy will help you to create more revenue sources and target the specific needs of potential clients. Sadly, this might also mean that your current clients might only find some of your products useful and stop buying the rest. But as with any strategy, you must give up some of the status quo for the much bigger future.

But this is also important for regulatory compliance. All of the financial regulators have opinions about financial products and they all are suspicious of product bundling. Pooled products used to be a way to reduce costs, making the market more liquid. Now, liquidity is not a concern for regulators. Opportunities for abuse in pooled products are just too big. Just think about the Volker Rule. The purpose of it is to separate transactions depending on the type of client and/or the firm. I provide an example below.

Not all financial products need to be unbundled. Even for Jack Kelly, his activities need not be clearly delineated. Obviously, he is doing quite well without doing so.

The point is this, for business, clear delineation of value propositions sets up the business in a ways that is easily comprehensible for both clients and regulators. It reduces regulatory risk while potentially growing the business.

So, there you have it: Compliance Officers can help revenue centers.

Volker Rule Example: If Client X wants to sell 100 shares of Global Sources and my firm also wanted to sell 100 shares of the same, it would reduce cost to just sell 200 shares at once as a single transaction. Volker Rule does not allow the broker-dealer to pool the shares. The reason for this is that while the sell order goes out as 200 shares, but the actual sales might take place is smaller blocks at various price points, which requires some complicating account to figure out whose shares sold at what price, and so on. 


Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses. He is a member of ACAMS and ACFE. 

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