RIA Compliance and Practice Management Blog

Meeting significant RIA compliance challenges as a small advisory firm

Posted by RIA in a Box

Feb 23, 2023 9:30:37 AM


Whether a firm has 10 advisers or 10,000, they are still tasked with the same responsibility to build and operate a compliant practice. For firms on the smaller side, however, there are a few added challenges which larger firms with more resources may not face. Primarily, small RIAs tend to lack the time, know-how and personnel to manage compliance processes in-house.

The good news? There are ways small firms can leverage outside help to fill in the gaps and build a robust RIA compliance program without taking time away from their clients. Small RIA compliance is just as important as compliance within mid-sized and large RIAs. Here’s how your firm can tackle these challenges, not matter how small your team.

How an RIA Firm Can Create a Culture of Compliance Checklist

Embracing RIA compliance technology

The financial services industry has experienced a recent boom in technology adoption and integration. There are platforms, software, apps and AI opportunities to improve or streamline nearly every facet of your firm — compliance included.

Some firms may be slower to adopt new technology than others. But when you do your research and train your team to embrace (instead of fight) change, you can build processes that make your RIA compliance so much more manageable.

Even the smallest RIAs require a chief compliance officer (CCO), though the title often falls on a senior leader who doesn’t have the time or expertise to commit to full-time compliance oversight. Compliance software, like that offered by RIA in a Box, is designed to help busy CCOs and their teams meet their compliance obligations without hiring additional team members.

Compliance software can address all aspects of the compliance process including:

When these critical components of small RIA compliance are already baked into your team’s tech stack, compliance becomes an automated and streamlined process.

Continuing education

Regulatory rules change often, which can pose a unique challenge for small RIA compliance programs. Unfortunately, not knowing a change has occurred isn’t a valid excuse for regulators during an audit or investigation. But unless your CCO (who likely pulls double-duty) has ample time to review regulations often, it’s hard to know what’s happening and when.

Amplifying your RIA compliance knowledge can be as easy as leveraging articles, videos, newsletters and more. These resources can help CCOs and compliance professionals cut through the noise to determine what action needs to be taken and when changes are going into effect.

Going one step further investment adviser representatives (IARs) may be required to meet certain continuing education requirements depending on the jurisdiction. Such courses are often designed by former regulators, compliance professionals and cybersecurity experts to cover a broad range of compliance-related topics and keep IARs in the know regarding regulations and requirements for their firm.

Working with consulting firms

Unlike larger firms, most small RIAs don’t have the ability or resources to bring on a full-time staff member to manage the firm’s RIA compliance processes and systems. But without ongoing oversight or management, firms are put in a risky position.

Should an audit occur, they may be stuck spending hours (even days) rifling through old paperwork or struggling to produce the necessary documents requested by regulators. A lack of processes and oversight makes it more likely a firm will fall out of compliance and potentially face hefty fines or penalties.

Instead of stretching your current team too thin or adding another full-time staff member to payroll, there is another option. Compliance consultants help small RIAs like yours navigate everything they need to know from registering your firm with the proper jurisdiction, updating your Form ADV, coaching you through an audit and more. While you should never outsource the CCO position, compliance consultants can offer the guidance and oversight your firm needs to get and stay compliant, while taking the pressure off your CCO.

Overcome small RIA compliance obstacles with RIA in a Box

The financial services industry has come far in its acceptance of new technology integrations and outsourced assistance. If your firm finds itself stretched too thin when it comes to developing and overseeing compliance processes, it’s likely you’d benefit from the help of RIA in a Box’s compliance software and consulting services. Get in touch with our team today to schedule a demo and learn more about how we help firms through ongoing compliance support.

Request a Demo of MyRIACompliance

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.

Topics: RIA Compliance, RIA Technology

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.

RIA Compliance & Practice Management

Stay up to date on the latest RIA compliance, operations, and technology topics.

Hear from industry experts as they keep you up to date on the latest regulatory developments and practice management topics.

Subscribe to Email Updates

Recent Posts