The account review

Duane E. Lee and Michael Daly
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Duane E. Lee: Executive Vice President, Cannon Financial Institute, Inc., USA
Michael Daly: Director of Risk Management and Operations, Pohl Consulting and Training, Inc., USA

Journal of Financial Compliance, 2020, vol. 4, issue 2, 167-178

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 (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2020
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