RIA Compliance and Practice Management Blog

In November 2022, the Securities and Exchange Commission’s (SEC) new Marketing Rule went into effect for all SEC-registered firms. But, what about the registered investment advisers (RIA) registered at the state level? 

While not all states have adopted the new rule, many states have, in fact, implemented at least some form of the new Marketing Rule. In order to remain in compliance and avoid potential fines and penalties, advisory firms must firstly understand which regulations are applicable to their firm (based on registration) and subsequently integrate the appropriate policies and procedures to reflect the necessary protocols under the relevant regulation(s).

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 growing number of RIAs the Securities and Exchange Commission (SEC) must examine, the new deadline financial advisers must meet to comply with the Department of Labor’s (DOL) fiduciary rule, the SEC’s new cybersecurity guidelines for investment advisers and broker-dealers, the growing interest among financial advisers to start their own RIA firms and a request by industry groups for an extension on the comment period for the proposed expansion of the Custody Rule.

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

In the financial advisory industry, regulatory compliance is paramount. Registered investment adviser (RIA) firms and Exempt Reporting Adviser (ERA) firms need to adhere to a variety of regulations and laws, and failure to do so can result in significant consequences, including legal and reputational damages.

At the same time, compliance can be time-consuming and costly, especially for smaller firms that may not have the capacity to hire a full-time compliance officer. In many cases, those firms choose an internal candidate to assume compliance duties in addition to their regular responsibilities, which overloads their bandwidth and leaves opportunities for error.

That's why many RIA firms choose to work with compliance consultants, who provide expert advice and guidance on regulatory compliance issues. According to one recent report, 34% of firms reported outsourcing some or all of their compliance program. But what exactly is compliance consulting, and how can your firm leverage this expertise to enhance your regulatory compliance program?

According to Securities and Exchange Commission (SEC) Rule 206(4)-7, registered investment advisers (RIA) must, “designate a chief compliance officer (CCO) to be responsible for administering the policies and procedures.”

However, choosing the individual to be your next CCO is often easier said than done.

Selecting the right individual to lead and administer your regulatory compliance program can be the difference between a successful program, which adds value and trust with your customers, and one which puts your firm at risk of regulatory failure and fines.

In this blog, we’ll review some commons dos and don’ts to help you select the right CCO for your RIA firm.

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 financial advisers attitudes toward wealthtech, the Securities and Exchange Commission’s (SEC) custody rule and the SEC’s 2023 examination plans.

Here are our top investment adviser compliance articles for the week of Feb. 24, 2023:

When looking for a new product or service, most people turn to Google. It’s free, convenient and offers millions of results within a moment. In fact, it’s estimated that the search engine giant processes north of 60,000 queries each second. Luckily for registered investment advisers (RIA), a sliver of those searches are individuals on the hunt for a financial professional.

One recent study showed that 42% of people begin their search for a financial adviser with a simple Google search – significantly higher than those who reported asking friends or family members.

Even though Google offers a great connection point for advisers and prospects, firms have been historically limited in their ability to use the platform for marketing.

It’s no secret the Securities and Exchange Commission (SEC) has focused in on advisory firms complying with SEC Rule 204-2, which includes specific archiving requirements for all books and records.

In a now somewhat infamous case, the SEC fined firms over $1.1 billion for failing to “maintain and preserve electronic communications.” 

And it would appear the SEC’s 2023 focus will be no different, with the SEC already bringing a case on a similar record keeping basis. In light of the renewed focus being placed on SEC Rule 204-2, this blog will highlight some of the key compliance archiving requirements for RIAs in 2023 and beyond.

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 Securities and Exchange Commission’s (SEC) concern about the potential risks of stablecoins, financial advisers’ attitudes toward the market at the start of 2023, Wealth Enhancement Group CEO Jeff Dekko’s insights on what drives RIA growth, the effect of a Florida ruling on rollover fiduciary requirements and an overview of the SECURE 2.0 Act.

Here are our top investment adviser compliance articles for the week of Feb. 17, 2023:

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.

The Securities and Exchange Commission’s (SEC) Rule 204a-1 or the “Code of Ethics,” requires all persons of a registered investment adviser (RIA) firm to submit securities holdings and transaction reports to the firm’s chief compliance officer (CCO) or other designated person(s). In order to mitigate potential risk, RIA firms must carefully manage their employee’s transactions and holdings, implementing a thorough preclearance and monitoring process.