One of our company’s longstanding commitments is investing time and resources to make the RIA in a Box service more valuable to the clients we serve. Since launching MyRIACompliance® in 2014, we have sought to make our service more efficient and higher quality by combining our human expertise with new tools and features. At RIA in a Box, we release new compliance software features and enhancements on a daily basis. Today, we officially released our new annual investment adviser compliance program review tool.
Today’s Release: Annual RIA Compliance Program Review Tool
Under Rule 206(4)-7 of the Investment Advisers Act of 1940, RIA firms are required to conduct an annual compliance review including the adequacy and effectiveness of the firm’s policies and procedures. As RIA compliance consultants, we often find that RIA firms run into preventable compliance issues by failing to thoroughly perform and document the completion of the mandatory annual compliance program review.
To help minimize the risk of serious compliance deficiencies related to insufficient annual compliance program reviews, we’ve just launched the Annual Review Tool as the new compliance tool now available as part of MyRIACompliance®. This new tool enables the Chief Compliance Officer (CCO) to centralize the annual review process by breaking down each component into manageable sections while ensuring the process is completed in its entirety as expected by regulators. After the CCO has completed the steps as outlined in the sections of the annual review tool, a detailed annual review report is automatically generated and available for download through the platform.
Components of the Annual RIA Compliance Program Review Tool
Firm Background
This portion of the tool will allow you to summarize any changes that your firm has undergone in the past year. This includes information such as regulatory assets under management growth, new employees, new service offerings, changes in fee structure, and registration changes.
Annual Risk Assessment
This step in the annual review tool ensures that you are completing your annual risk assessment by completing the required steps as part of the included risk assessment tool. This tool allows you to holistically evaluate each area of potential risk at your firm relative to your firm’s unique business model.
Annual Review Checklist
This checklist serves as comprehensive “to-do” list for the Chief Compliance Officer to ensure no element of your mandatory annual compliance program review goes neglected unintentionally. Topics included in the checklist include: best execution, books and records, custody, cybersecurity, and business continuity and succession planning.
Review of Key Regulatory Developments
This section of the tool will give you the opportunity to review recent regulatory developments for the year including recent regulatory guidance provided by the Securities and Exchange Commission (SEC) and North American Securities Administration Association (NASAA) by providing a library of resources related to each regulatory development. After reviewing each development, changes or updates to policies and procedures that were made at your firm will be noted in your firm’s annual compliance program review report.
Review Compliance Manual and Advisory Documents
A requirement of Rule 206(4)-7 of the Investment Advisors Act of 1940 requires that advisors review their policies and procedures manual and make relevant revisions that accurately reflect changes that occurred within the firm or in the greater regulatory space in the prior year. The annual review tool allows the CCO to easily access relevant notes and documentation to facilitate a thorough and accurate review of the compliance manual and other advisory documents such as the firm’s investment advisory contracts and Form ADV Parts 1 and 2.
Staff Compliance Training
To help meet regulatory requirements and to maximize the effectiveness of your firm’s annual compliance meeting, this portion of the tool provides a detailed list of topics to discuss with your staff during the meeting along with a place to document relevant notes and attach files related to each individual topic discussed.
Final Summary Comments/Observations
After completing the annual compliance program review process, the tool allows you to enter a summary of your findings and actions that will be implemented at your firm moving forward. This summary will appear in the final section of your firm’s automatically generated annual compliance program review report.
Annual Review Report
After completing each section, the tool automatically aggregates all information collected and generates a professional annual review report readily available for download and to be provided when requested during your firm’s next regulatory audit.
The new Annual Review tool is a feature of the MyRIACompliance® platform. To learn more about the complete features and functionalities of the platform, click here.