Episode 29: Market Volatility

On this week’s episode we discuss Market Volatility and he’s also providing some key considerations for CCOs regarding shifts in market behavior.


CCO Buzz: Hello, welcome back and Happy Holidays! Christmas is literally right around the corner and we here at the CCO Buzz hope your yuletide season is warm and bright. Today we have Core Compliance’s very own Senior Compliance Consultant. He’s with us to discuss Market Volatility and he’s also providing some key considerations for CCOs regarding shifts in market behavior.

The market has been very volatile in the last few days. How does this type of market behavior affect compliance programs?

Sr. Compliance Consultant:  Volatile markets and bear markets usually create scenarios where clients become frightened. This can lead to concerned clients calling in and wanting to discuss the impact of the market on their portfolios. In some cases, this can lead to Investment Adviser Representatives and Registered Representatives not taking those calls, not wanting to deal with an angry or frightened client, and that often leads to client complaints.

CCO Buzz: So, what should a Firm’s CCO do in this type of environment?

Sr. Compliance Consultant: CCO’s can help minimize the impact that these volatile markets have on their clients by emphasizing to their respective Investment Adviser Representatives and Registered Representatives the need to get in front of the issue. Not only taking client calls but being proactive and calling the clients. Panicked clients tend to make hasty decisions. The clients are counting on professionals in the industry to help stop them from making these hasty decisions in reaction to market moves.

CCO Buzz: Do these volatile markets lead to any other compliance considerations?

Sr. Compliance Consultant: Yes, at times, these markets will swing so widely that it moves client portfolios out of their respective asset allocations. These out of allocation portfolios can reveal themselves in exception reports and other compliance reviews. CCOs should understand that in periods of volatility, asset allocations can vary widely from day-to-day. CCOs should refrain from pushing Investment Adviser Representatives and Registered Representatives to correct these asset allocation drifts until short term periods of volatility are over.

CCO Buzz: Hmm, any closing thoughts on market volatility?

Sr. Compliance Consultant: Yes, volatile markets are not a new phenomenon. Firms have dealt with these types of markets for decades. These are certainly times when listening to managers and supervisors as to the best way to handle these markets is imperative.

CCO Buzz: Ok, if our listeners have any other questions or want additional information where can they reach you?

Sr. Compliance Consultant: I can be reached at info@corecls.com or at (619) 278-0020.

CCO Buzz: Thanks so much. Happy Holidays to you and your family! And on behalf of everyone at the CCO Buzz, we hope all of our listeners have a wonderful, magical and warm Merry Christmas!


Well that’s it for this week’s episode. If you’d like additional information, please check out our website at www.corecls.com. You can also follow us on Facebook, LinkedIn or Twitter @CoreCLS. Thank you and we hope you tune into next week’s episode of the CCO Buzz.



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