Leading into 1 January 2019 when the AML/CFT Act became legislation Ray White (RW) was like all level 2 entities. They had spent considerable time and money during 2018 investigating their options. They were busy working on Risk Assessments and Programmes, estimating the potential numbers of jobs and at the same time looking for the most cost effective and compliant solutions. The real estate guidance from the DIA was not available, nor would it be until December 2018.
After a lengthy review of all aspects of AML/CFT and researching a number of proposals, RW made a decision to work with the Trust, Integrity and Compliance Company (TICC). This was because they had a strong opinion on a number of significant matters and were almost alone in being able to offer an actual solution which was up and running - one which could be implemented across the network, with training at all levels, and a workable solution where RW could actually submit cases for verification from 1 January 2019.
It involved setting up a designated business group (DBG), signing up the network as members, outsourcing everything related to AML to TICC - initiating systems, process, training and record keeping - it was to be one of NZ’s biggest DBGs.
The partnership between the TICC and Ray White Real Estate was formed, initially on a handshake as RW were well down a path with suppliers who could not deliver. Approval for the DBG was sought from the Department of Internal Affairs (DIA), and granted.
It was a real team effort and involved ongoing discussions with the DIA by members of the TICC team. The aim of the DBG was to ensure that the RW network, consisting of 175 offices or those who chose to join, could carry out customer due diligence (CDD) on their clients when a property was listed for sale from 1 January 2019.
It was initially thought and widely voiced that a DBG would not be approved by the DIA. It was TICC’s research that located parliamentary papers evidencing a ministerial exemption, thus confirming this was not so and that it’s formation would actually benefit all parties including the DIA. It provided a way for the RW network, with obligations under the AML legislation, to work together using the same processes, documents, and systems whilst being able to rely on other entities in the Group.
Franchises could elect to join the DBG once it was established by completing an application. A subscription based fee on an estimated number of listings payable monthly was calculated and covered all aspects of AML which were outsourced to the TICC.
The DBG significantly reduced the reputational and compliance risks to the RW brand. The flat fee removes the incentive to avoid CDD and the centralised approach provided common standards across the network.
RW basically outsourced all requirements around AML at a cost, which at the time and currently, remains substantially lower than what is offered by competitors. Not only did it cover CDD at all levels, it covered training, support, record keeping, assistance with annual reporting, and significantly reduced audit costs. The latter because the DBG was the subject of the audit, not each reporting entity in it.
The majority of cases are turned around very quickly, more complicated cases are supported by the field services team and includes personal contact where necessary. This results in a low incidence of delays or exceptions. The AMLOnline Portal provided by TICC gives the DBG compliance officer and senior management oversight across the network.
It provides a great relationship with supervisors - the DIA and the NZ Financial Intelligence Unit (FIU). It has resulted in actionable intelligence to the FIU. The DIA have identified the RWDBG as a best practice entity, affirming that it provides a model for others in the Real Estate Industry to meet.
The team from TICC comprised Adam Hunt, Alice Tregunna, Louise Coad, and others who were instrumental in working with Ray White personnel Graeme Fraser, Treena Drinnan, the zone chairs, and CEO Carey Smith to establish and implement the DBG across most of the RW network.
RW Real Estate Head of Network Services Treena Drinnan has commended TICC on their agility during unprecedented times:
"Quickly adapting and evolving in response to Covid 19 and providing continued uninterrupted service to the RW DBG. Enabling our DBG members to conduct business seamlessly throughout this period."
"It provides a great relationship with the supervisor - the DIA and and the NZ Financial Intelligence Unit (FIU)."
- Graeme Fraser
National Sector Manager (Real Estate) TICC
Graeme has since joined TICC as National Sector Manager for Real Estate and Louise Coad will shortly take up a position at the DIA as a senior regulator. Alice Tregunna was recently appointed CEO as Adam Hunt carries out work for the IMF and remains on the board.
During Covid-19 lockdown levels 4, 3 and now 2, TICC continued carrying out jobs, training, signed up new clients in both the Real Estate and legal sectors, carried out as usual just from home.
For more information on how we can assist Real Estate, visit our AML for Real Estate page to see what we can do for your business.
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