We recently hosted a value-packed webinar where COMPLY Compliance Consultants Corrie Scoby and Kelly Smith enlightened participants on best practices and tactics to effectively conduct the necessary compliance tasks for investment firms.
One of the highlights of the event? A poll question that sparked insightful discussions.
Top Compliance Review Challenges and Effective Countermeasures
In the webinar, we posed the question, “What, in your experience, is the biggest challenge associated with compliance review?” Attendees shared their unique experiences, shedding light on the array of challenges faced by investment advisers across the sector. Here’s what we learned!
- Maintaining comprehensive and accessible records
Detailing books and records review, the speakers emphasized the need for a holistic approach, regularly reviewing risk alerts, keeping records readily accessible, and updating policies and procedures. Investment firms should leverage SEC document request lists and stay vigilant about commonly noted deficiencies.
- Ensuring accuracy in regulatory filings
Corrie and Kelly advised firms to annually review each licensed person’s filings for accuracy, compare Form U4 and ADV Part 2B, and train investment adviser representatives (IARs) to submit proper disclosure. Firms should also download and review reports from the IAPD website and run FINRA broker checks for duly registered individuals.
- Monitoring employee personal securities transactions and conflicts of interest
The speakers stressed the importance of their firm having a Code of Ethics that training that both instruct employees to provide regular account holdings and investment account statements. Kelly emphasized the importance of proper disclosure of Outside Business Activities (OBAs), such as involvement with nonprofits, which could potentially influence client recommendations.
- Reviewing marketing and advertising materials
Corrie and Kelly advised firms to keep track of their marketing materials, confirm compliance with regulations, maintain proper disclosures and verifications.
- Adhering to the various Anti-Money Laundering measures
Firms were advised to familiarize themselves with the AML programs of custodians and other financial entities they work with. They were also encouraged to monitor red flags for money laundering and conduct individual reviews, including ADV part 2b, U4, social media, marketing, political contributions, personal transactions, remote office, and client account file reviews.
It’s clear from the webinar and poll that compliance reviews encompass a broad spectrum of responsibilities. However, investment firms can overcome these hurdles and ensure best industry practices by developing a comprehensive, customized, and routine review process.
To help you further, our team of compliance professionals at COMPLY is always ready to assist with tried-and-tested strategies, tools, and advice.
Compliance Reviews with COMPLY
COMPLY exists to support firms and their compliance teams CCO. As a matter of fact, COMPLY offers tailored consulting and technology services designed to streamline your compliance program.
For instance, the 2024 U.S. Compliance Calendar Guide offers a roadmap to success with compliance reviews. The guide offers insights into reviews and tasks to complete throughout the year, along with best practices and tactics to help firms achieve compliance with confidence.
Not only that, but COMPLY’s consulting services can be a powerful resource for compliance teams! Our team of industry experts understands the challenges CCOs face, from keeping up with evolving regulations to ensuring consistent compliance across a growing team. With COMPLY, you don’t have to go it alone.
Ready to navigate the complexities of compliance reviews with ease? Let’s talk!