RIA Compliance and Practice Management Blog

Common RIA Compliance Questions Related to Books & Records

Posted by RIA in a Box

Jun 2, 2015 10:00:00 AM

As RIA Compliance consultants, we get questions every day related to registered investment adviser (RIA) books and records and registration document requirements. A review of recent inquiries revealed a vast variety of questions – from trading records to net capital requirements – but electronic storage and delivery were hot topics, particularly in April when many advisory firms with December fiscal year ends were distributing their updated Form ADV and privacy policy to clients.

In general, documents of all types can be delivered to clients electronically if those clients have consented to electronic delivery. We generally recommend that an RIA firm's standard investment advisory contract include an electronic delivery consent provision, so clients can opt-in upfront. Alternatively, clients can indicate willingness to receive electronic documents using a separate authorization form. Evidence of this consent – either in the form of a signed contract or separate authorization form – must be maintained by the firm. We frequently receives requests for sample electronic delivery authorization forms and provides templates free of charge to our compliance clients.

Download Our Sample Electronic Delivery Authorization Template

Questions related to electronic document storage are another common topic  received by our former regulators and compliance professionals on staff. RIA firms are generally permitted to store records electronically, and if they do so, are generally not required to also keep hard copy records. Some additional requirements apply, however, notably the necessity of backing up these records, either to the cloud or by creating a local copy, and ensuring the prevention of unauthorized access. The specific details of how the advisory firm will meet these requirements should be detailed in the firm's policies and procedures or compliance manual.

Topics: RIA Compliance

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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