Ready for anything: Compliance at Cluttons Real Estate

"I've seen a lot of change since 2011. The biggest thing has been the evolution of the risks to estate agency businesses, especially over the last 10 years."

“The amount of risk to the business is much higher than the decade prior, and the type of risk, client profiles, geographical risk factors and property-specific challenges have all evolved substantially.

It used to be more like you were waiting for the next ML (Money Laundering) directive, now it’s a lot more frequent. Changes to regulations are a response to risks for the sector, so it makes sense they are increasing."

"There's always something now! (laughs). It’s easier to view change as a constant and be ready for it than to be worried. You have to be more dynamic, have a deeper understanding of the business you’re working for and be more holistic about risk.”

"A lot of that sentiment is a result of the economy. As we all know, the property market is inseparable from the wider economy, and so, of course, it impacts those working within it quite significantly. We have faced a tough economy lately.”

“The property system gets a lot of discussion. I think it's fair to feel that way, and understandably, people are stressed. I have always held the view that regulations are a result of an increase in risk. My view of the regulations isn’t negative as they are the foundations for keeping our business and clients safe.”

“In person, things do feel a lot more positive. I enjoy working in compliance. I wouldn’t have lasted this long if I didn’t. I can only speak for myself, but it's a very challenging and diverse role, and I personally enjoy it.”

“Training, they need to feel supported and comfortable with our procedures and also change. The main thing is feeling supported to deal with change. I’m also fortunate in that I am supported in my role, so it has a flow-on effect.”

“When people think about compliance roles in estate agencies, they often focus solely on AML (Anti Money Laundering). But the reality is broader. The breadth of knowledge and skills required is much more than just risk, regulations and policy. Compliance  encompasses contract negotiations, training, regulatory work, deep property expertise, reputational risk and an understanding of how our teams and business works."

"I would say be confident in your skills, not to be worried or apprehensive. You’ve designed and adapted workflows before; technology is a part of those changes now, it’s there to help you”

“Before you do anything, make sure you thoroughly check that the system works for your clients. It has to work for them to work for you. That is non-negotiable when it comes to implementing something your clients will be using.”

"You need to consider the legal and regulatory compliance benefits. You get more systematic, objective due diligence through platforms like Thirdfort, which is essential for things like Source of funds (SOF). You want to systemise where you can and then leave room for your team to apply their own rationale where it matters. These are highly skilled individuals. We want them to spend time on work that is interesting to them and develops them professionally.”

"You have to be pragmatic and realistic, you can't write a process for everything because things change and there are always exceptions. There needs to be an element of adaptability in everything. By having a really good understanding of how your teams work with your firm’s processes, you can prepare them for situations outside of the status quo. Training is important here, understanding context and having the confidence to know when to ask for help.”

“While basic ID verification and SOF checks could theoretically be done manually, it would be incredibly time and resource-intensive. Costs would increase significantly. One thing that stands out as an issue with a paper process for me is PEPs and screening. I can’t imagine asking my team to go through the myriad of sanctions lists when there is technology that can do it for you.”

“As an example, using Thirdfort saves us so much time on each individual file, of course, but also on processes like bulk screening and ongoing monitoring. In terms of other things, I think what I mentioned before, it allows the team to work on other, more rewarding work. And of course, you can’t escape the benefits it has for client experience.”

“Sure, an example would be if we have a commercial client who is purchasing a property. We would first run a KYB (Know Your Business) check to understand who is behind the company, including the Ultimate Beneficial Owners (UBOs). Next, we would complete ID checks, proof of address and screenings on all relevant individuals within the business. We’d be looking to establish the legitimacy of the business, the funds and all parties involved.”

“So the depth of verification would be the same, we would have most likely started with ID, screening and SOF. The Thirdfort SOF report would have identified the dividends source in the process and gathered evidence relating to it. We would then run KYB on that business, which was declared and follow the same process with the UBOs I mentioned above.”

“Of course, there’s the standardised baseline verification and documentation to be compliant and follow our process. A big part of it is also understanding the bigger picture, asking yourself ‘Does this make economic sense’, applying rationale to each piece of evidence, considering the commercials and the scale of the deal itself. These elements all have an impact on each case and how the process ends up looking. Technology helps us to facilitate the time needed for the analytical part.”

"We love using Thirdfort. It's a vital part of our onboarding process. The team finds it incredibly positive. It's an easy system to navigate and simple to use. Checks come back in about 20 hours on average as opposed to multiple days, which is great.”

"We get no feedback from clients because they just do it; it's become business as usual for them. They understand the need to complete these checks. We provide upfront information about what is going to be required and what protections are in place. Under 2.5% of our clients need to call Thirdfort for help with the app."

“We (Cluttons) have plans in place for that type of thing. It is increasingly rare. In the instance they really cannot do it, we would have a semi-manual process including Lite screening.”

“I’m trying to think of one word here. I will go with ‘Outstanding’”