What Should a Family Office Ask About a Manager's Compliance Program?

Ask the manager to show that its compliance program reaches the people and decisions that create risk in this fund. A manual is a starting point; find out who owns the controls, how exceptions are recorded, and what happens when a rule is missed.

Clarify Ownership and Authority

Identify the person responsible for compliance, who they report to, and whether they can raise an issue outside the investment team. Ask who approves policy changes, tracks staff acknowledgements, and checks whether procedures match the fund's activities. If compliance is one of several duties assigned to an employee, ask how workload and conflicts are managed.

Request the compliance manual or a relevant summary, along with the policy review schedule and training records. The program may cover personal trading, marketing, conflicts, record retention, investor communications, and confidential information. Ask which policies apply to the strategy and how staff know what to do in a live situation.

Test Exceptions and Escalation

Ask how an employee reports a suspected breach, who receives the report, and how the manager decides whether it is material. Find out how exceptions are logged and investigated. Ask who approves them and how they are closed. Request a summary of material breaches or policy exceptions and the corrective steps taken, subject to appropriate confidentiality limits.

Look for a clear escalation path and records showing follow-through. A red flag is a response that treats every issue as informal, cannot identify who reviews it, or says no exceptions have ever occurred without explaining how they are detected. Ask what changes after an incident and how staff are told about the change.

Compare Written Policy With Daily Work

Speak with compliance or operations staff who perform the controls, not only the senior person presenting the fund. Ask them to walk through a routine example, such as how a marketing item gets reviewed or how a personal transaction is disclosed. Compare that explanation with the manager's stated policy and ask who checks completion.

Understand how duties are separated where practical. If one person can initiate transactions, maintain records, and approve reconciliations, ask what independent review offsets that concentration. For controls over cash and transfers specifically, see controls that can prevent unauthorized trades or transfers. For a separate look at related-party disclosure, see what disclosures to expect about related-party transactions.

Questions for the Manager

Ask for answers tied to a policy, log, or named responsibility. If the manager cannot share a record, ask what it can provide to demonstrate that the control is performed. Have your attorney or compliance specialist review requirements that depend on the fund's structure and regulatory status.

• "Who is accountable for compliance, and who can they report concerns to?"
• "How are exceptions recorded and investigated? Who approves them, and how are they closed?"
• "What material policy breaches occurred, and what control changed afterward?"
• "Which employee checks that staff follow the relevant procedures?"
• "How do you confirm that marketing and investor communications are reviewed?"

Checklist

• Obtain the compliance manual or a relevant policy summary.
• Identify the compliance owner, reporting line, and policy approval process.
• Review training records and records of exceptions, breaches, and corrective action.
• Speak with staff responsible for day-to-day controls.
• Compare compliance procedures with the fund's operations and disclosures.
• Ask a specialist to review legal or regulatory questions tied to the structure.

Go deeper: What signs of weak financial controls should investors look for?.

Sources: The Family Office Book, The Family Office Club Investor Due Diligence framework. Informational only, not financial, legal or tax advice.