Print Tech Insights 12: 12/19/11 – Saving Money on Compliance Technology

- by Larry Goldfarb

As many of who have read in this column over the last few weeks, the world of compliance technology was turned on its head by the Schwab acquisition of Compliance11.  Recent anecdotal evidence seems to indicate that the price of its employee trading suite of products has dropped and will continue to drop to attract customers and their accounts.  It does seem to appear that Schwab is more interested in attracting brokerage accounts to be within the Compliance11 system than growing its new software acquisition.  That seems to make sense given the fact that Schwab probably spends more on office supplies than Compliance11 makes in revenue in a given year.

But the acquisition of Complaince11 made me take another look at technology firms with vendor relationships.  Compliance Science has a relationship with ACA, the compliance consulting firm.  SunGard has a large suite of products whose revenue dwarfs that of its employee code of ethics suite.  As a consumer of these services, firms should look to leverage an existing relationship in order to a get a good price for these services. While “soft dollars” are not allowed as a means of paying for compliance products, the firms that own these products will probably give you a significant discount if not give it away in return for other business that you may do with them.

A review of the landscape of vendors that offers these services includes as mentioned above, ACA, Schwab and SunGard.  TD Ameritrade offers technology to its institutional customers as does Fidelity.  There are many others not mentioned here.  Thus before going out and buying a compliance product, speak to your brokerage rep or another large vendor that is working with you to see if there might be an opportunity to get the product price significantly reduced.


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