By Rule 204-2 under the Investment Advisers Act of 1940, emails, in addition to all electronic communication, that are sent and received by investment advisors are subject to the Securities and Exchanges Commissions (“SEC”) recordkeeping requirements. In addition to the SEC, many states have adopted similar books and records rules. In order to remain compliant, archiving emails will be imperative to you. Archiving is a great way to keep your inbox neat without actually deleting emails, meaning they’ll remain searchable later, if needed by an examiner. By definition, archiving is the act of saving inactive emails, at least until legally required to do so. In this case, investment advisors are required to store emails for no less than five years. The main point is that important emails can be made active again if need be.
While this may seem like an extraordinary task (the word ‘archive’ itself implies a massive amount of information), emails can be archived individually, or all together. Remember that email backup and email archiving are two different things. Backup is essentially keeping a copy in a separate location as its primary counterpart. This is great for emergency situations and should also be considered as part of your compliance and cybersecurity routine. Archiving, however, is more systematic. Not only can you use archiving to keep perfect records of your correspondence, it also helps to free up storage on you PC, protects intellectual property, and can protect you in a potential legal situation. Think of an email archive as a digital insurance policy.
Year over year, books and records remains a common RIA compliance deficiency, so we created a quick list of do’s and don’ts as it relates to email archiving for investment advisors:
Do:
- Take advantage of technology. Conduct through research on the archiving solutions available..
- Understand the difference between backup and archiving.
- Develop a proper system and policy to archive.
- See if an archive can integrate with your CRM.
- Understand how much needs to be reviewed.
- Regularly review the integrity of the archiving system.
- Keep it simple
Don’t:
- Save archives to vulnerable places
- Be afraid to ask questions
- Make it complicated
- Forget to clean and update regularly
- Archive selectively
Having and implementing an email archiving program is a crucial part of any RIA’s compliance program. As RIA compliance consultants, we want to highlight the importance of an RIA firm properly archiving and recording all client related item. Implementing a proper email archiving system can save you time, money, and possibly litigation. If you’re still unsure of what to do here, please reach out and ask for help.
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.