RIA Compliance and Practice Management Blog

How to choose an RIA Compliance Consultant

Posted by RIA in a Box

Apr 12, 2014 4:44:00 PM

Canva - People Hangout Together at Coffee ShopWhile the number continues to decline each year, many registered investment advisor (RIA) firms still do not utilize the services of an RIA compliance consultant. Obviously, as compliance consultants ourselves, we have a biased opinion, but we believe that most investment advisers can benefit greatly from the services of compliance firms and experts. Unfortunately, it can be a challenge for many RIA firms to stay on top of the latest investment adviser regulatory requirements in a time efficient manner. A strong RIA compliance consulting firm can help ensure that an investment advisory firm stays compliant without the principals of the firm having to devote too much costly time that can often be better devoted to spending time with prospective and existing clients.

Every day we receive phone calls from investment advisory firms that are looking for RIA compliance assistance and not sure how to evaluate the services of a regulatory compliance consulting firm. If you are an investment adviser trying to choose an investment advisor compliance consultant, here are some key questions to consider:

  1. Is the RIA compliance firm familiar with my firm's business model? What makes the RIA industry so interesting is the innumerable types of business models that are all considered registered investment advisers. Be sure that your that the firm has lots of previous experience and familiarity with the type of investment advisory services that you provide.
  2. Is the compliance consultant familiar with the unique regulatory rules for where my RIA firm is registered? Whether you investment advisory firm is registered with the SEC, the state of Texas, or the state of Hawaii, be sure that your RIA regulatory expert has prior experience in assisting other firms registered with the SEC or the state(s) overseeing your RIA firm. 
  3. How responsive is the compliance firm? Make sure that the compliance firm has a deep enough of roster of compliance experts on staff so that there is always someone available to answer your time sensitive question. You don't want to have to wait days for a response if your point of contact is on vacation, etc.
  4. Does the compliance firm have a service level that fits my needs? The compliance needs of each RIA firm can be very unique. Some quite honestly require a lot more hands-on assistance than others. Make sure there is a level of service, be it minimal or very hands-on, that will directly address your firm's compliance needs without having to spend a fortune.
  5. How is the investment adviser compliance consultant utilizing technology to deliver service? As every investment adviser knows, technology should never replace the human expert, but technology should complement the human expertise to streamline communication and make the retrieval and updating of various filing and internal compliance documents as efficient as possible. Make sure you are working with a professional firm that has made the necessary investment in technology so that you're saving precious time. 
  6. How much should an RIA compliance consultant charge me? As we all know, cheaper does not always mean better when looking for expertise. With that said, terrific investment adviser compliance assistance is available for a very affordable price to RIA firms of almost any size. Thus, make sure you're getting a fair deal with transparent pricing.
  7. Do I want to be billed hourly or have unlimited access? If you think you may need direct access to speak to a compliance expert, make sure you have unlimited access to the experts when needed and aren't billed by the hour when assistance is needed. The last thing you want is to be hesitant to call your compliance consultant because you don't want to run up the bill or are unsure of the final cost.

It's always important to note that an RIA compliance consultant does not remove the need for an individual on your staff to fill the role of your firm's Chief Compliance Officer (CCO). However, a good compliance consulting firm should make the life of your firm's CCO much easier by providing proactive guidance and by giving he or she a team of experts that can be relied upon whenever needed. The role of a compliance firm begins long before an RIA regulatory exam and provides the principals of an investment advisory firm with the ability to sleep easier at night knowing that their firm has established the proper culture of compliance and is staying on top of all the relevant investment adviser regulatory requirements.

Need help with compliance? Our team can help determine the best fit for the needs of your firm

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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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