Part-time consulting and non-compete

I’m looking to hire someone in the alternatives space as a part-time consultant or advisor. Ideally looking for someone who is actively working In the industry but realize that non-competes and outside business clauses will add complications to hiring, especially as my company is in financial services, broadly speaking.

Does your firm allow you to conduct outside business? If so, is it a huge compliance headache?

Goal is to gauge sentiment to know what I can potentially expect. Talked to one guy and he said that compliance would need to essentially conduct full due diligence - think light banking process - on my company before they let him work with my firm.

3 Comments
 

Based on the WSO threads, navigating non-compete agreements and outside business activities in the financial services industry can indeed be complex. Here are some key points to consider:

  1. Non-Compete and Compliance: Many firms in the financial services sector have strict non-compete clauses and policies regarding outside business activities. These are designed to prevent conflicts of interest and protect the firm's proprietary information and client relationships.

  2. Due Diligence Process: As mentioned in your experience, compliance departments often require a thorough due diligence process before approving any outside consulting or advisory roles. This can include a detailed review of the potential employer, the nature of the work, and any potential conflicts of interest.

  3. Disclosure and Approval: Typically, employees must fully disclose any outside business activities to their compliance department for approval. This process can vary in complexity depending on the firm's policies and the potential for conflicts of interest.

  4. Potential Restrictions: Even if approved, there might be restrictions placed on the scope of work, confidentiality agreements, and the amount of time that can be dedicated to outside activities.

  5. Variability by Firm: The ease or difficulty of engaging in part-time consulting can vary significantly from one firm to another. Some might have more flexible policies, especially if the consulting work does not present a direct conflict with the firm’s operations or client interests.

It's advisable to prepare for a rigorous compliance process and to clearly understand the specific policies of the firm the potential consultant is currently employed with. This will help in setting realistic expectations and planning accordingly.

Sources: PwC - Financial Services Advisory - Capital Markets Basically Just Risk & Compliance?, Q&A: Former MBB Consultant, Consulting=money suck?, Closed topic, Economic Consulting Q&A - Past experience at major firms

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