Today, registered investment adviser (“RIA”) compliance software often falls into one of two categories: email archiving or employee supervision. This has been the case as very few comprehensive software platforms designed exclusively for RIA firms exist. Traditionally, most compliance software platforms have been built to serve large financial institutions and broker-dealers. However, since the introduction of MyRIACompliance software platform in 2013 we’ve worked tirelessly to fill the technology void that exists to help RIA firms better manage regulatory compliance requirements. Historically, most investment advisers have looked to traditional compliance consulting firms to provide support. While there a number of great compliance consultants, the challenge with the consulting model is that support is often just reactive and offers very little proactive guidance or efficiency gains that can be achieved with software. We sincerely believe the best RIA compliance solution seamlessly delivers innovative software and expert advice as a single offering.
When comparing RIA compliance software vendors, investment advisers may want to ask the following eight diligence questions:
- Is the compliance software platform designed exclusively for RIA firms?
Very few financial services compliance software solutions are designed to exclusively, let alone primarily, serve investment adviser firms. Instead, most of the platforms have been designed to meet the regulatory needs of large broker-dealers or private funds operating globally. While these general compliance platforms may offer robust tools and capabilities, the customization and resources needed to make the solution work for a traditional RIA firm can be overwhelming. Most RIA firms do not have an internal informational technology team to support a custom enterprise software installation.
- What are the overall capabilities and features of the RIA compliance software platform?
Most compliance software platforms marketed to RIA firms are designed to assist with only one or two components of a firm’s regulatory compliance program. For example, there are a number of compliance archiving solutions available that will help to archive the firm’s email, social media, and website. In addition, there are a number of employee trade monitoring software solutions marketed to investment advisory firms. While archiving and employee trade monitoring software may each solve critical needs, be careful not to mistake one of those platforms as a full RIA compliance software solution. In general, a RIA compliance software platform should offer tailored Chief Compliance Officer tools such as a compliance calendar and exportable log. The platform should also provide robust staff supervision tools to manage required attestations or approvals and to review employee trading activity. Furthermore, the platform should be tightly integrated with the compliance service offering to help streamline and facilitate common compliance tasks such as Form ADV updates, registering the firm in a new jurisdiction, or adding a new individual investment adviser representative to the firm.
- Does the vendor have the technology resources to constantly improve the software platform?
Many legacy compliance software solutions were built many years ago utilizing outdated on-premise software installations. As these solutions have attempted to migrate to cloud platforms, often this has led to a number of issues including a disappointing and dated user experience. Thus, RIA firms should ensure the platform is designed with modern cloud-based technology. Also, it’s critical that the software firm has capable internal development and support teams that quickly respond to customer feedback to improve the product, regularly introduce third party technology integrations with leading investment adviser customer relationship management and portfolio management and reporting systems, and constantly release new features and fixes on a regular schedule.
- What is the total RIA compliance cost including software and expert consulting support?
Many RIA firms spend considerable money by separately purchasing compliance software and compliance consulting support. Firms should strongly consider a bundled solution that combines both software and human expertise. Such a solution is generally more cost efficient and also ensures a more integrated service experience. However, firms should be careful to make sure that the firm providing the bundled service is the firm that actually designed and built the software platform. Firms reselling third party platforms do not control the software’s product road map and support and may not have the ability to quickly fix system bugs or innovate based on customer feedback.
- What is the training and onboarding experience?
The RIA firm will be making a significant financial investment when purchasing compliance software and thus it’s essential that platform is fully adopted by the firm’s entire staff. Investment advisory firms should be able to quickly onboard onto the compliance software platform within hours or days rather than weeks or months. The RIA compliance software vendor should have a dedicated client onboarding and support team to not only offer training to the firm’s Chief Compliance Officer or other compliance team members, but also the firm’s entire staff.
- How financially stable is the software provider?
The number of financial technology vendors serving RIA firms continues to grow at a rapid pace. While the number of new entrants is generally a positive for the future of the industry, investment advisers should consider the long term viability of the vendor. It’s possible the vendor may not be profitable and its future is highly dependent on its ability to raise additional capital from investors. It is critical that all RIA firms properly implement a stable compliance program that is easy to demonstrate during a regulatory audit. Firms should consider the potential implications of having to abruptly switch vendors or not having immediate support or access to the firm’s compliance data
- Do the software creators have a full understanding of investment adviser regulations?
The benefit of working with many RIA compliance consultants is the detailed investment adviser regulatory knowledge they bring to the relationship. Such consultants are generally well equipped to quickly answer a multitude of RIA compliance questions. However, most consulting firms do not possess the technical resources needed to build a robust compliance software platform On the contrary, there are many great technologists that can build exceptional software but lack intricate knowledge of relevant investment adviser rules and regulations. This lack of knowledge can leave much of the heavy lifting and system customization to the RIA firm itself and also leads to potential regulatory gaps, such as the introduction of a new rule like the Department of Labor fiduciary rule, which the platform may fail to address.
- Is the vendor’s pricing published and easy to understand?
All RIA firms are required to publish their fee schedules on the Form ADV Part 2 and it’s a fair expectation the compliance software vendor should similarly publish pricing online that is easy to access and understand. Non-published pricing can lead to extended negotiations and the risk of dramatically overpaying relative to other similar firms. Firms should be sure to understand the length of the contractual commitment and whether there are any additional implementation, training, hourly consulting, or module fees.
Why Over 1,900 RIA Firms Trust the MyRIACompliance Solution
We provide compliance support to over 1,900 RIA firms via our
industry-leading MyRIAComplianceTM online RIA compliance software platform which allows firms to more efficiently and proactively manage compliance. Our in-house engineering and development collaborated with our team of compliance experts to first introduce our software platform in 2013. Since the system’s initial launch, our culture of constant innovation has led to a steady stream of new features releases and system enhancements including the recent release of our employee trade monitoring tool. With electronic data feeds to over 15,000 financial institutions, the MyRIACompliance employee trade monitoring tool automates the submission and tracking of personal securities holdings and transactions.
Popular features of our compliance software platform which is designed solely for RIA firms include:
- Robust Chief Compliance Officer supervision, digital attestation, and reporting capabilities
- Automated compliance calendar tailored to the unique requirements of each firm
- One click audit preparation with a fully exportable compliance log tracking all system activities
- Onboarding and registration of new individual investment adviser representatives
- Centralized storage and archiving of critical firm compliance documents
- Requesting and tracking of Form ADV changes including the firm’s annual amendment
- Access to webinars, checklists, and other testing and training tools
Today, most firms are still not taking full advantage of the advancements in RIA compliance technology that have been achieved in recent years. We see our primary competition as the outdated use of paper and spreadsheets to manage compliance and are committed to helping RIA firms better manage regulatory compliance through the use of modern technology and exceptional service. Since our founding in 2005, we’ve only served investment advisers and believe our proprietary RIA compliance software platform can offer considerable efficiency gains while also keeping the advisory firm up to date on constantly changing regulations. MyRIACompliance’s modular features can be quickly tailored to address the unique compliance needs of investment advisers of all sizes and complexity.
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.