Annual compliance reviews, a must for all Securities and Exchange Commission (SEC) registered financial advisory firms. However, despite the ruling having been in effect since late 2004, many registered investment advisers (RIA) continue to struggle with certain aspects and requirements of the review process.
In a recent webinar, hosted by COMPLY® portfolio firm RIA in a Box, experts discussed some of the most common challenges and deficiencies noted by the regulators over the past few years.
And when speakers asked the audience to identify their most significant challenge when conducting an RIA annual compliance review, attendees stated:
- Assembling the necessary documentation: 20 percent
- Finding the time to dedicate to the process: 37 percent
- Gaining executive buy-in: 4 percent
- Reviewing regulatory updates: 24 percent
- Updating policies: 10 percent
Using technology and outside expertise to aid in the RIA annual compliance review process
The answer to these significant challenges? Leaning into your resources. Although the responsibility of your RIA firm’s annual compliance review ultimately falls to the chief compliance officer (CCO), they certainly don’t have to do it alone. In fact, leveraging regulatory compliance technology in addition to managed services, can significantly aid in the process, reducing manual work and spotting potential red flags which otherwise might have been missed.
And the audience agreed. In fact, during that same webinar, 50 percent of attendees stated they had worked with an outside compliance consultant and 58 percent stated they had implemented a regulatory compliance technology to help assist with annual compliance reviews. An increase from previous years, during which only 40percent of firms stated they had integrated a regulatory compliance technology to aid with the annual review process.
The takeaway? While compliance departments are certainly capable of conducting an internal annual review which meets the SEC’s or state’s requirements, more and more firms are benefiting from external resources which support a firm’s ability to effectively and efficiently manage the RIA annual compliance review process.
Looking for support in your own annual review or other compliance tasks? ComplySci’s compliance experts are here to help you get the most out of your compliance program. As your dedicated compliance resource, our team will help you customize your platform to meet the specific needs of your firm today and tomorrow. Schedule a call today to learn more about ComplySci’s Managed Services and how we can help you COMPLY.