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The account review
Journal of Financial Compliance,
4
(2),
167-178
(2020)
Abstract
The account review is a fundamental component of modern business. They are a strategic and detective tool to assess both performance and satisfaction. Successful account reviews provide an opportunity to grow relationships and reaffirm commitment to an account’s success, whether the account under review is a client, or a vendor. For a fiduciary, organised under US law, the account review represents not only an industry best practice, but a regulatory requirement. A successful fiduciary account review is not an assessment of risk alone. It also validates expectations. Expectations about quality of performance, and validation that all contractual obligations are being met. The account review can corroborate achievements and identify gaps in compliance. It is also a tool to identify and address unnecessary exposure to risk. For trust companies, the fiduciary standard binds a trustee to always act in the client’s interests above their own. The account review ensures adherence to requirements of the contract, and to the mandates of law. A fiduciary is an ethical custodian who must adhere to both the letter of law, but also the spirit of law, while always being obedient to the duties of loyalty and impartiality. The account review provides governance and oversight and helps senior management and the Board of Directors to measure potential exposure to client dissatisfaction, or even litigation. This paper explores six separate and distinct account reviews required during the life of a trust account, which provides a comparative roadmap that could be aligned to any number of other business disciplines.
Keywords: account review; preacceptance review; postinitial acceptance review and/or postacceptance review; administrative review; investment review and/or Reg. 9 review and/or Regulation 9 review; account closing review; watchlist
The full article is available to subscribers to the journal.
Author's Biography
Duane E. Lee is one of Cannon’s most senior instructors. Duane frequently finds himself instructing both the Regulatory Agencies and the Financial Services Firms under their supervision. Prior to joining Cannon, Duane was employed by M&T Bank in Buffalo, New York as Administrative Vice President. His responsibilities included senior management of Personal Trust, Institutional Custody, Employee Benefits, Corporate Trust, Mutual Fund Administration and Sales, as well as Operations. Prior to joining M&T Bank, he was employed by the United Bank of Illinois as Senior Vice President and head of the Trust and Investment Division performing Trust services throughout all seven member banks of the Holding Company. Prior to joining United Bank, he was employed by the Office of the Comptroller of the Currency as a National Trust Examiner. Duane has written articles appearing in Trust & Estates Magazine, Bank Administration Magazine and Journal of Financial Compliance and Risk Management Magazine.
Michael Daly is the Director of Risk Management and Operations for Pohl Consulting and Training, Inc. He is a high-energy professional with 25 years of experience in organisational effectiveness and enterprise improvement. Mike focuses much of his work in the areas of fiduciary risk management, administration and operations. For over a decade, Mike served as Chair of the ICB/ABA Certification of Securities Operations Professionals. He served the Board of Directors of the Fiduciary and Investment Risk Management Association (FIRMA) for eight years, and was a frequent contributor to the ABA’s Trust and Investments Magazine. He has been a trainer and national conference speaker for the ABA, FIRMA and Texas Bankers Association. When Mike is not at home in San Francisco, CA, he enjoys traveling the world and photographing everything the sights have to offer.
