For this installment of our CCO Spotlight series, we focus on ComplySci’s CEO, Amy Kadomatsu, interviewed Helen McAuley, Chief Compliance Officer at Breckinridge Capital Advisors (Breckinridge), a Boston-based, independently-owned investment advisor specializing in investment grade fixed income portfolio management.
You currently serve as Chief Compliance Officer for Breckinridge. Can you tell me a little bit about the firm and what drew you to them?
Helen: Breckinridge was founded in 1993, so we have been around for more than 25 years. We manage over $41 billion in AUM as of 09/30/2020, and have 84 employees. One of the things that drew me to the CCO role at Breckinridge was their commitment to sustainability, and the role it plays throughout the organization. I was impressed with how this commitment extends beyond the investment process. As a firm, we are a certified B Corporation and incorporated as a Benefit Corporation. These designations obligate us to incorporate purpose, accountability and transparency into our organization. We pursue these requirements in many ways, and these are published in an annual benefit report which is available on our company website.
Can you tell me a little bit about your path and how you came to be a CCO?
Helen: I remember when the CCO role didn’t exist, and frankly compliance as we know it today didn’t exist. I really took a winding path to get to where I am today.
I studied marketing in college, and my first job wasn’t even in the financial services industry. I actually started my career at a big publishing house in Manhattan. My first job in the industry was part of the operations team in the back office, where I got to work in the trenches with the staff. Nothing was really off limits as long as I was willing to learn, so I was doing account administration, reconciliation, trade settlements, pricing… pretty much learning from the ground up. From operations, I moved into various marketing roles, including shareholder/investor communications.
As compliance started to become more prominent in the industry, I started interacting more with the compliance team in my marketing/communications role, and became interested in what they were doing. So, when a compliance job opened up, I decided to try it. Now, I’m going to admit something: I did not like compliance when I started in that role. I thought it was boring and that I had made the worst career choice! But I stuck with it and ultimately, things changed. When the compliance program rule went into effect, things started to really turn around and it did get more interesting. I consider myself really fortunate to have been trained by some very smart and well-rounded compliance professionals, people who took the approach that your first answer should rarely be a simply “no.” Instead, try “What do you want to do, and how can we help the business get there while staying within the boundaries of compliance regulations?”
Thinking about your path, as an MBA rather than a JD like many other compliance officers, was that difficult? And, to what do you credit your success in your role as CCO?
Helen: Without having formal legal training, it probably took a lot of extra work to navigate the regulatory framework, especially getting accustomed to legal writing. That said, I believe having an MBA and the direct experience in different roles and functions allowed me to think about compliance from the business side.
When I first moved into a compliance officer role, I was working at a small firm. So, I had no choice but to dive in and learn everything. I read everything I could get my hands on, attended conferences, networked with other professionals, and sought different avenues of learning so I could get different perspectives on topics. I learned early on that CCOs need to be creative at times and to be flexible. Best practices can be a useful guide, but don’t assume what another firm is doing is always the best thing for your firm.
“Don’t forget about the resource that is right in front of you – your firm. To be successful, you need to understand the business, understand the teams, and get to know everything. If you don’t know how accounts are reconciled, for example, sit with that team until you understand it. You can’t write or assess policies, procedures, or programs if you don’t understand what the firm does.”
Can you suggest or recommend two or three go-to resources for junior compliance people who are looking to grow in their careers?
Helen: I would say compliance is multi-faceted.
First, the technical knowledge are really important. You have to read rules and regulations; there’s no way around it. You don’t need to memorize the rules, but you do need to be familiar with them. Nowadays, a quick internet search can pull up many sites to review rules and regs. Compliance conferences such as those put on by firms like NRS, Ascendant, and ACA can also be good resources for compliance staff. These firms put together good panels and topics, which can help train junior compliance staff on many topics. Firms like NRS also have online courses and certifications to help junior compliance staff build their regulatory knowledge.
Second, it can be beneficial to get involved with industry groups. There are numerous ones and they range from from local compliance groups to large, national groups like NSCP. When you engage with these types of groups, you get to network with other compliance professionals, share ideas and get additional resources.
Third, don’t forget about the resource that is right in front of you – your firm. To be successful, you need to understand the business, understand the teams, and get to know everything. If you don’t know how accounts are reconciled, for example, sit with that team until you understand it. You can’t write or assess policies, procedures, or programs if you don’t understand what the firm does.
I couldn’t agree more. You brought up the importance of creativity and flexibility, and understanding the business. Some of those are not obvious skills that would be important for a CCO to have. Can you talk a little more about how those skills have helped you to succeed as a CCO?
Helen: Sure! I think soft skills are sometimes ignored when it comes to the CCO role. The technical knowledge is important, but it’s critical to have effective soft skills. Being able to communicate effectively and to develop relationships with your business partners and teams can really help your cause. Regardless how great the culture in your firm is, if people don’t like or trust the CCO, it’s going to be an uphill battle.
For me, flexibility, creativity, and being nimble are important. Even if the compliance rules don’t change, something in the company can change. Being able to recognize that, understanding the business, and remaining flexible are important qualities in creating an effective compliance program.
A big frustration for some new CCOs is the business’s attitude of “don’t get compliance involved until you need to.” You want them to get you involved right away, so you aren’t in a position of having to say “no.” If your business partners trust you, it’s not going to be “don’t get compliance involved.” Instead, they’ll say “let’s get compliance involved early.” Involved CCOs are, to some extent, dual-hatted all the time. They’re not just focused on the legal and regulatory aspects; they’re also looking out for the business, helping to identify solutions that will be effective without being burdensome.
It’s also important for CCOs to be able to listen. Too often, I think compliance staff don’t do that effectively. Listen to what people are saying. Take a step back, think about what they’re saying and what that means. Be a partner, and really integrate yourself into the business. When you master both the technical piece and the soft skills, you are more likely to be seen as a valued business partner and not simply “the compliance person.” It is about being sensitive to the business but upholding the commitment to compliance.
“Be a partner and really integrate yourself into the business. When you master both the technical piece and the soft skills, you are more likely to be seen as a valued business partner and not simply ‘the compliance person.'”
That’s so important. Do you think your background, coming up through the ranks like you did, gives you an advantage of sorts over the more traditional legal perspective?
Helen: Maybe from the business perspective but I know that only gets me so far in a compliance role. My legal “expertise” is from being in the position, having to learn on the job and working closely with counsel. I’ve had to be humble, recognize that I don’t have all of the answers, and not be afraid to consult with others to get those answers. And, I’ve always been open about that. It really goes back to being a business partner to my business partners. In doing so, there’s a much better chance I’ll be brought to the table sooner.
When you think about the role today, what are some of the unique challenges CCOs face?
Helen: One big challenge is that there’s so much expected of CCOs today – both from the business side and from the regulators. It seems regulators expect CCOs to be experts in everything.
Another thing I find challenging is that there’s a dearth of technology for compliance professionals. There are some great systems out there like ComplySci that help, but much of the available technology tools today only handle certain parts of the compliance program. There are so many other things we’re doing. The SEC has sophisticated systems for big data analysis. Unfortunately for most firms, there just aren’t cost-effective tools like that for us on the ground level. That’s a big challenge. We need to look at vast amounts of data, which is really tough when we don’t have the tools we need to help us. There are a lot of compliance professionals that still do much of their work manually which, of course creates risks and becomes a huge time sink.
The regulatory demands on compliance professionals today are also greater than ever. We’re being asked to provide more disclosures rather than better disclosures. The recent addition of Form CRS is a good example. Clients are already overwhelmed with what they’re supposed to read; I question whether adding another disclosure document will make things better. A better focus might be finding ways to improve upon and provide higher-quality disclosures. It’s tough for CCOs to navigate these demands today.
Today’s CCO is expected to be a legal expert, have soft skills, understand the business, and be a big data expert/data scientist. There seems to be an ever-changing skill set needed for this position, which I imagine is both incredibly challenging and exciting at the same time.
Helen: Yes! It is so different than it was, even as recently as five years ago. There’s so much more asked of CCOs today. You are expected to be an expert in everything and to have all of the answers. In some ways, it’s like going through an annual performance review and being given targets that are impossible for any human to achieve. While it can feel very challenging at times, it can be one of the best parts of being a CCO, especially if you like challenges. It forces you to continuously evolve as a professional, stay abreast of the industry and regulatory framework, but continue to nurture and build on your business partnerships, all while embracing the day-to-day changes of the compliance world.
As everyone knows, we’re in the midst of an unprecedented situation with the COVID-19 pandemic. Can you speak a little bit about the effect it’s having on the business and about how you’re preparing in the context of your role?
Helen: At a high level, we’re trying to be proactive and transparent. At the end of the day, we want to ensure our advisory services remain uninterrupted, while taking care of our employees’ health and safety. Thanks to the efforts of our staff, especially our technology team, we have been operating without significant issues since we went remote in March.
All of these challenges we’ve talked about today are part of the reason we started this CCO Spotlight series. I think for people who are either not in the business or who are just starting in compliance roles, it’s difficult to grasp the complexity and to truly understand the challenges of the career path. Last question: What do you do to blow off steam? What’s a guilty pleasure of yours?
Helen: Yoga! I am a certified yoga instructor and over the years, it has taught me a lot about being fully engaged but not being always attached. I know it’s not for everyone, but yoga is where I find the opportunity to stop and self-reflect. In our crazy times, especially being a CCO today, taking time to self-reflect is important. I believe that time afforded on yourself can help you become a more effective CCO. I recognize it is not something we’re often presented with during the day, but when you’re able to find that time, you can bring your best self to the job.
I’m so glad you mentioned that! I think sometimes we do feel like it’s a luxury to take time for ourselves. You have so many things barraging you every day. To be able to take 60-90 minutes to drain your mind of the noise and just focus on self-improvement is sometimes when the best ideas come out. Thanks again for sharing your valuable insights and experiences with our readers!
Editorial Note: At ComplySci, we understand the tremendous value compliance professionals can gain from networking and learning directly from their peers. For the CCO Spotlight blog series, we are sitting down for candid conversations with Chief Compliance Officers from some of the firms we work with. This blog series will share those CCOs’ thoughts, ideas, and best practices for compliance programs with our readers. The views expressed in this blog post are the CCO’s own views and do not necessary reflect the views of their firms.