RIA Compliance and Practice Management Blog

2021 Regulatory Trends for RIA Firms

Posted by RIA in a Box

Feb 3, 2021 6:38:21 PM

2021 RIA Regulatory ForecastJust as the industry continues to sprint forward with every piece of new technology, the regulatory landscape for registered investment advisers ("RIAs") continues to shift around us to accommodate these new tools and environments. The last 12 months have seen even faster technology adoption with many RIA firms going remote for the first time to make work possible during the pandemic.

As we look forward to 2021, we see three regulatory trends that will have a big impact on the way advisors work – during the pandemic and beyond.

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Remote-Friendly Tech Stacks

With the vaccine making its way across the country, returning to the office is starting to feel like a real possibility – but don’t fold up your virtual Zoom background just yet.

For starters, it sounds like “back to normal” is still a ways away (and the timeline swings between “fuzzy” and “mostly fuzzy” every day). On top of that, it turns out that a lot of advisory firm employees seem to enjoy working from home.

All that to say: Remote is not going anywhere any time soon.

Tech stacks are nothing new; they’ve made the possibility of working from home easier for years. But now that 70% of financial services employers rated working from home as a positive experience and expect to continue leveraging it in some form going forward – pandemic or no pandemic – expect to see more and more vendors specializing in remote support.

Look out for increased efficiencies as tech solutions compete to provide the best ways to connect home and office, including making it easy to monitor necessary requirements like employee trade monitoring from afar.


Whether it’s through phishing, credential stuffing, or exploiting weaknesses brought about by the pandemic, cybersecurity has proven to be an ongoing concern of the digital age – and the increase in remote working has only served to shine a light on how seriously the topic should be taken.

One unfortunate trend we expect to see continue in 2021 is the increase in cybersecurity deficiencies, which the North American Securities Administrators Association ("NASAA") has recorded on a biennial basis since 2017.

Couple that with an increased dependency on third-party tech stacks, and it’s easy to understand why 52% of legal and compliance experts are concerned about third-party cybersecurity risks today.

Between the third-party providers and financial advisers themselves, we expect to see:

Back to the Basics with Rule 206(4)-7 (the "Compliance Rule") 

This might seem like a no-brainer for most advisory firm owners, but according to the SEC’s latest risk alert, an alarming number of RIA firms are operating with some troublesome regulatory compliance deficiencies including:

    • Inadequate compliance resources
    • Insufficient authority of Chief Compliance Officers
    • Not performing annual reviews
    • Incomplete policies and procedures

As we've noted before, Rule 206(4)-7 continues to cause preventable RIA compliance issues and advisory firms should be working hard in 2021 to address any of these common issues as they continue to receive regulatory focus.

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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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