Before I joined the financial services industry, my primary occupational pursuits consisted of computer programming and information technology. Believe it or not, I left that field because, as I saw it at the time, it seemed everyone else had the same skills that I had. Fast forward to the present time and I find myself in an industry that, although dynamic, hasn't much changed.
The world of information technology, computer programming, and related fields certainly has changed. Regardless of our industry, though, there are constants in the occupational and professional worlds. One of those constants is the necessity and desirability of being adequately compensated for our skills and expertise.
When I was in college, I had an acquaintance whose side business consisted of freelance computer programming. Mind you, in the late 1990s, companies were willing to pay college students good money for even a modicum of skill for their coding projects.
One of the adages that I had heard espoused was this:
"When it comes to my services, I can do it cheap, I can do it right, and I can do it fast. Pick any two."
Considering that he was a college student with little to lose, that adage made complete sense. With so much demand, the professional had been able to dictate those terms and conditions. Customers went along with it; perhaps it made sense for them too.
Even as a long-time business owner, pricing services is never easy. In the end, the price of anything is what the buyer and seller are willing to take and offer, but one has to consider comparable services in the marketplace, business expenses, or even the business owner's interest in acquiring that customer, i.e. pricing someone out.
Compliance of any type, but especially compliance which is intended to assist fiduciaries adhere to rules that, on paper, are easy to interpret. Anyone who has spent even a short time in the investment advisory world and reads the Investment Advisers Act of 1940 knows what things mean. They can read the rules and know how to apply them in their daily business. Herein lies the rub (in this paragraph). The rules are easy to interpret; in fact, they are too easy. The hard part is knowing how others have interpreted these rules, how to integrate risk and reward, and how to, in the most operationally and fiscally efficient manner possible, apply and implement these rules inside a firm.
That's why compliance can be costly. That's why it should be costly. That's why it is costly.
We don't subscribe to the "you pick two" methodology. We do things right, we do things fast (which, in the investment advisory compliance world, would be, meeting and never missing regulatory deadlines or when a client expects something to be done), but we don't do things cheaply. We simply strive to have our pricing competitive with the comparable marketplace.
If something is cheap, it can readily be dispensed with. That is a far cry from how I would want professional services described. If you want it done cheaply, you may have to do it yourself.
