Last year was an especially demanding one for James Clements’ compliance team at Carson Group, which started adopting artificial intelligence (AI) tools.
Clements, who until recently was CCO at Carson Group, “met that challenge and brought a record of leadership, strategic foresight, and operational excellence that strengthened the organization’s compliance posture during one of the most complex regulatory periods in recent memory,” his nomination read.
Clements “demonstrated the values at the heart of this award, including leadership, effectiveness, collaboration, communication, constructiveness, and vision,” according to the nomination.
AI tools were brought into the advertising review area of compliance to help flag problematic areas. When issues were found and an ad needed to be edited, AI was able to speed up that process, Clements said.
Apart from AI adoption, Clements’ team focused on compliance with regulations of the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, and they worked closely with the legal, marketing, and sales teams, plus an outside broker-dealer.
His team was consistently ranked by partner advisors to be among the top three teams in the entire company.
Clements attributes that to the team’s accessibility, its focus on building relationships, and its overall emphasis on something similar to good, old-fashioned customer service.
“We return calls, answer questions, and have those difficult conversations,” he said. Conversations that included talking about troublesome actions or areas and what steps to take to enhance compliance.
“That’s where some compliance departments fail,” Clements said. “They don’t have that extra layer of customer service.”
Clements’ compliance team worked exceptionally well together and with internal and external partners. One reason was the emphasis he placed on clear communication.
If after two emails the conversation was not completed, the rule was to “pick up the phone,” Clements says. He views this gesture as a way to build relationships.
Clements, who until April was CCO for Carson Group’s broker-dealer and its registered investment advisory entities since 2020, noted in an interview with Compliance Week that he is “past the 50 percent mark” of his life and has learned a tremendous amount during his years in compliance.
Clements began his career as an advisor and moved into compliance later. Over the years, he has at times stepped out of a direct compliance position and into firm leadership roles, but he has never left his compliance grounding and experience behind.
“The best thing that happened is I had that compliance background, so I knew the rules and regulations and what we could and couldn’t do,” Clements said.
Early in his career, a chairman told Clements that his number one priority was that he never wanted to see the company’s name in the papers, for the wrong reasons. Clements took that to heart and used it as a rudder as he carried out his compliance function.
Clements’ years in compliance have taught him that “compliance officers have to have pretty thick skins and to have a moral compass” that can stand up to pressure from leadership.
“We should be comfortable giving advice to leadership and saying ‘I don’t agree with that,’” Clements said. “If you’re looking for a lot of thanks and pats on the back, you’re not going to enjoy compliance.”
It’s not the role of compliance officers to “get to yes” with leadership. The role is to guide and to think beyond just one moment in time to the years ahead.
“Sometimes leadership doesn’t understand that, and you have to keep saying it,” he said.
Leadership may be taking a short-sighted approach to an issue, and it’s the compliance officer’s responsibility to remind them “this is what could happen,” Clements said.
“You do get a sense of accomplishment when what you’ve done has made a difference, like when you went through a really good regulatory audit,” he said.
Clements has learned that regulators may want evidence or background information about an organization’s actions, including what role compliance played.
He takes lengthy notes about certain firm decisions, the conversations he has engaged in, and the advice he has given leading up to those decisions.
“Compliance is a great field for people who want to get into it,” Clements said.
Clements believes that AI does not threaten the compliance field.
“AI won’t take away your job,” he said. Compliance officers are needed for their institutional knowledge, their judgment, and their history. AI will handle repetitive tasks more quickly.
Clements recently returned to a firm leadership position, and since April has been president of CreativeOne Securities, LLC, a challenge he felt was right for him, now that his children are grown.
“I’m very much bringing my compliance background to this role,” he said. “I’m working with the compliance group to make sure they have a firm grounding of what we want to see going forward. This is the baseline.”
His top priority now? “We want to see our name in the press for positive reasons, not for fines because we wanted to do something for short-term gain.”
