RIA Compliance and Practice Management Blog

NASAA's Recommended Regulatory Compliance Best Practices for RIA Firms

Posted by RIA in a Box

Oct 19, 2015 9:20:54 AM

best regulatory compliance practices for RIA firmsEarlier this week, the North American Securities Administrators Association (NASAA) released its 2015 Investment Adviser Coordinated Examinations Report.  As in past years, NASAA has once again provided an updated set of best practices for investment advisory firms to use as a guide for developing and improving their compliance programs. This year’s recommendations did not change much from the previous set of recommendations, but it’s still a good idea to review the 2013 report as well. The following is the latest set of regulatory compliance best practices for registered investment adviser (RIA) firms published by NASAA:

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  • Prepare and maintain all required records, including financial records. Back-up electronic data and protect records.
  • Prepare and maintain client profiles or other client suitability info.
  • Review and update all contracts. Make sure all fees are clearly noted and adequately explained in the contract.
  • Review and revise Form ADV and disclosure brochure annually to reflect current and accurate information. File amendments in a timely manner.
  • Prepare and distribute a privacy policy initially and annually.
  • Calculate and document fees correctly in accordance with contracts and ADV.
  • Keep accurate financials. File timely with the jurisdiction. Maintain surety bond if required.
  • Implement appropriate custody safeguards, paying attention to direct fee deduction if applicable.
  • Review all advertisements, including website and performance advertising, for accuracy.
  • Provide disclosure brochure to clients initially, then provide updates and offers to deliver afterwards as required.
  • Prepare a written compliance and supervisory procedures manual relevant to the type of business to include a business continuity plan.
  • Review solicitor agreements, disclosures, and delivery procedures.

As RIA compliance consultants, we recommend that the Chief Compliance Officer (CCO) of all investment advisory firms review this latest regulatory exam summary report to determine if any compliance changes need to be implemented at their firm. Make sure to check back soon as we will be breaking down each compliance category from the NASAA report with additional blog posts in the coming weeks.

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Topics: RIA Operations, 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.

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