RIA Compliance and Practice Management Blog

Each Friday, we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser (RIA) compliance and regulatory issues. This week's recap focuses on the market for acquiring RIAs, the Securities and Exchange Commission’s (SEC) proposed amendment about custodianship, regulations which might debut this year and affect investment advisers, a federal court’s decision to strike down the Department of Labor’s (DOL) guidance about rollovers and how RIAs are hiring in the current state of the U.S. job market.

Here are our top investment adviser compliance articles for the week of Feb. 10, 2023:

Growing your registered investment adviser (RIA) firm is an exciting accomplishment. And one which will come with significant milestones: hiring more team members, getting a bigger office, creating new processes…

One of the most important milestones for every RIA firm? Reaching $100 million assets under management (AUM) and registering with the Securities and Exchange Commission (SEC). That is, if your RIA firm hasn’t already done so by that point.

To clarify, if you started out as a small- or mid-sized firm, you may have initially registered with your state’s regulators. But as you grow, there comes a time when you may be required to register with the SEC instead.

Here’s a look at when that may be and what the SEC RIA registration requirements are.

On Feb. 7, 2023, the Securities and Exchange Commission (SEC) Division of Examinations released its 2023 annual exam priorities report, highlighting the commission’s accomplishments and four-part mission. Examinations during 2022 focused on new rulings which went into effect in 2022, impacting registered investment advisers (RIAs) and other SEC-registered firms.

Guided by new leadership, the SEC responded to emerging events which posed significant risks to investors and the markets, conducted hundreds of outreach events and engagements, published seven risk alerts and examined approximately 15% of the RIA population. 2022 was a year which offered EXAMS learning opportunities which were also included in the annual SEC exam priorities report.

As the regulatory landscape for financial advisory firms becomes increasingly complex, many firms are turning to outsourcing as a way to manage their compliance obligations. After all, compliance can be time-consuming and tedious, especially for smaller firms whose chief compliance officer (CCO) is wearing several hats.

However, while outsourcing certain compliance tasks can be a cost-effective solution, it is important to understand the risks and limitations of out-of-house compliance, as well as potential limitations proposed by the Securities and Exchange Commission (SEC).

The SEC has recently shed more light on how registered investment advisers (RIAs) should approach outsourced compliance tasks while keeping within regulatory guidelines. Read on to learn more about what they said and how you can keep your firm compliant.

Each Friday, we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser (RIA) compliance and regulatory issues. This week's recap focuses on the release of the Securities and Exchange Commission (SEC) 2023 exam priorities, amendments to the RIA Custody Rule, a look at cryptocurrency and environmental, social and governance (ESG) investing and a highlight of COMPLY Chief Technology Officer Helen Johnson.

Here are our top investment adviser compliance articles for the week of Feb. 3, 2023:

In 2023, cybersecurity risks are among the top concerns at registered investment adviser (RIA) firms. The National Institute of Standards and Technology (NIST) has developed a cybersecurity framework to help organizations, including investment firms, of all sizes identify, assess and manage cybersecurity risks.

Notably, the Securities and Exchange Commission (SEC) utilizes the NIST framework to manage its own cybersecurity program. Many investment firms also refer to the NIST framework for information security guidance. With that said, this tool is relevant in the financial services landscape, particularly for investment advisers.

In this guide we’ll break down the NIST framework for investment advisers and give practical tips for how your firm can successfully apply these guidelines.

On Feb. 7, 2023, the Securities and Exchange (SEC) Division of Examinations released its 2023 annual exam priorities, highlighting focus areas for the coming year. The stated priorities include a critical focus on new rulings impacting registered investment advisers (RIA) and other SEC-registered firms, such as the SEC Marketing Rule, which went into effect in late 2022.

While initially introduced in December 2020, the Securities and Exchange Commission’s (SEC) New Marketing Rule officially went into effect on Mar. 4, 2021, with an effective compliance date of Nov. 4, 2022.

With this change in ruling, registered investment advisers (RIA) now have the ability to use client testimonials, past-performance illustrations and endorsements from third parties. However, these changes are complex and come with a number of restrictions, limitations and a plethora of new disclosure requirements. What did not change, however, is the antifraud provisions of the rule. In other words, be truthful.

Each Friday, we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser (RIA) compliance and regulatory issues. This week's recap focuses on how the Securities and Exchange Commission (SEC) conducts its examinations, findings from the SEC’s probes of RIAs over cryptocurrencies, techniques RIAs can implement to find new clients, why some advisers aren’t following the trend of outsourcing portfolio management tasks and the surprising enthusiasm advisers have expressed toward integrating cryptocurrencies into their financial planning.

Here are our top investment adviser compliance articles for the week of Jan. 27, 2023: 

At investment advisory firms, where the work is always plenty and the day are always full, compliance teams cannot afford to just “keep up.” For a compliance team to successfully mitigate the risk of noncompliance, it has to proactively equip its firm with the appropriate compliance protocols and procedures, always staying ahead of trends. In today’s digital-first environment, that often means investigating the latest trends in compliance software and technology and implementing what’s right for the firm.

In 2022, RIA in a Box introduced additional features and functionality designed to help investment advisory firms tackles the most pertinent compliance challenges including heightened risk and increased regulations from the Securities and Exchange Commission (SEC).