COMPLYConnect is here! The conference brought together more than 200 industry experts from across the country, all in the name of regulatory compliance education. Today, in a collaboration between the COMPLY™ portfolio and PitchBook, one of the sessions examined private investment activity amongst investment advisory firms and brokerage firms.
With day two under our belt, we’re sharing some of the top takeaways we heard from our industry-leading speakers, COMPLY’s Chief Regulatory Officer John Gebauer and Annemarie Donegan of Pitchbook.
Top takeaways from day two of COMPLYConnect 2023
Attendees gained some incredibly valuable insight, and we have more in store for them tomorrow! These are some of the top takeaways from this session:
1. There has been strong industry growth in both the number of firms and assets managed.
Investment advisory firms and brokerage firms have experienced remarkable growth in recent years, characterized by an increase in both the number of firms and assets under management. This growth is attributed to various factors, including rising investor interest, expanding product offerings and favorable market conditions.
Donegan highlighted that this growth “signals where the industry is headed next,” suggesting that further expansion and consolidation are likely in the coming years.
2. This growth has contributed to an attractive environment for consolidation. The robust growth of investment advisory firms and brokerage firms has created an attractive environment for mergers and acquisitions (M&A) across the industry.
This shift toward consolidation is a natural progression in a thriving sector, driven by several key factors:
- Expanded product offerings.
As firms seek to broaden their product offerings and cater to a wider clientele, consolidation provides a strategic avenue to gain access to new capabilities and expertise. Merging with firms that possess complementary products or services can significantly enhance a firm’s value proposition and expand its market reach.
- Market expansion.
Mergers and acquisitions enable firms to expand their geographic presence and tap into new markets, thereby diversifying their client base and revenue streams.
- Enhanced competitive landscape.
The consolidation trend is also driven by the desire to strengthen competitive positioning in an increasingly dynamic industry. Mergers and acquisitions can create larger, more resilient firms with greater resources to invest in technology, research and marketing, enabling them to compete more effectively in a rapidly evolving market landscape.
As Gebauer said, “These conditions have given rise to incentives for firms to merge.” Smaller firms, in particular, are turning to mergers to achieve substantial growth and gain the scale needed to compete with larger players. Medium-sized firms are also actively participating in the consolidation wave, either merging with peers or positioning themselves for acquisition by larger entities.
3. Firms are investing in regulatory technology (RegTech), but there is room for further development.
Regulators are introducing stricter rules and expanding their oversight, which is presenting more challenges for firms. This evolving regulatory environment is driving market participants to seek innovative solutions to enhance regulatory efficiency and streamline compliance processes.
“These changes will require new processes at your firms, and we think that points toward greater use of RegTech solutions at your firm,” Gebauer said. RegTech solutions, or regulatory technology, encompass a wide range of tools and software designed to automate compliance tasks, streamline workflows and enhance risk management practices.
The adoption of RegTech is gaining momentum as firms seek to navigate the complexities of the evolving regulatory landscape.
Complying with COMPLY
How can you more proactively meet these changes? With a trustworthy and adaptable partner who takes compliance just as seriously as you do! Meet COMPLY.
During last year’s COMPLYConnect, we officially announced the launch of COMPLY, the new parent brand for the ComplySci®, RIA in a Box®, NRS® and illumis® companies. A year later, we’re still supporting compliance professionals and teams with their compliance programs.
COMPLY offers tailored consulting and technology services to help your firm identify and address compliance risks. By utilizing COMPLY’s tools and solutions, your firm can ensure it has a thorough compliance program that complies with applicable regulations and protects clients’ and investors’ trust and your firm’s reputation.
We also offer events like COMPLYConnect to help compliance professionals help their firms comply with confidence. It’s only day two, and attendees have gained some incredibly valuable insight. Stay tuned to learn more about what comes from day three.