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You found the right firm!  RIA registration consultant, Registered Advisor Services offers experienced registration consulting services to help you navigate the state or federal regulations for your new investment advisory firm.  With over 10 years’ experience working with both state and federal regulators we can help guide you through the process in a timely and efficient manner.  Briefly, the process is this.

⇒First, you need to form the entity under which you will operate your new advisory business.  We can answer your questions about any state or federal regulatory requirements.

⇒Next, we prepare the entitlement paperwork to entitle you to the FINRA computer systems needed for the registration process.

⇒After we have a business consultation about how you want to operate your new registered investment advisory firm, we will prepare for you the following documents:

• Customized Form ADV Part 1,
• Form ADV Part 2A Brochure,
• Form ADV Part 2B Brochure Supplement,
• Investment Advisory Agreement and/or Financial and Consulting Agreements customized to how your firm will operate,
• Investment Policy Statement,
• Customized Written Policies and Procedures Manual,
• Form U4, and
• Any state specific forms needed if you are pursuing state registration for your firm.

⇒After your review and approval of these forms, we will submit them for you with the appropriate regulator for their review and comment.  We will be your liaison with the regulator responding to any questions they may have concerning your registration application, until your firm is ultimately state or federal registered and ready to operate.

⇒When our turnkey registration process is completed, we will provide you with a detailed letter outlining your future RIA compliance requirements for your newly registered investment advisory firm as well as provide you with RIA compliance resources to help with either the state or federal regulatory compliance requirements.

Call us today (603) 292-6772 or send an email to info@w4h.d62.myftpupload.com for more information!

Every year, in early January, the Financial Industry Regulatory Authority (FINRA) sends an email to registered investment advisors requiring that the RIA log onto the Investment Advisor Registration Depository (IARD) website to confirm the individuals who have access to that system on behalf of the advisory firm.  FINRA includes a deadline within their email along with a link for the certification process.  Advisors who do not complete the process by FINRA’s deadline have their account suspended.  This is not a difficult process and takes all of about 5 minutes to complete.  Save the trouble of being locked out of the IARD system and complete the process now.

I came across this Newsletter from the Center for Internet Security, Thomas F. Duffy, Chair, Ms-ISAC offering simple, yet thoughtful ideas of how to protect your electronic devices from malicious cyber activity.  Some hints will be familiar while others may be new.  As registered investment advisor (RIA) firms think about what they need to do to protect their client’s nonpublic personal information, this article provides some helpful topics.  Cybersecurity continues to be an RIA compliance concern for the regulators, so it should be a concern for investment advisors as well.  It’s a quick and very worthwhile read. Stay safe!

The Office of Compliance Inspections and Examinations (“OCIE”) of the Securities and Exchange Commission (“SEC”) has identified its 2016 examination priorities organized around the same theme as last year.  That is:

1. Retail Investors/Investors Saving for Retirement: Examining matters of importance to retail investors, including investors saving for retirement-which will include a review of exchange-traded funds (ETFs) and ETF trading practices, variable annuity recommendations and disclosure, and potential conflicts and risks involving advisers to public pension funds.
2. Issues Related to Market-Wide Risks: A continuation of its focus on cybersecurity controls at broker-dealers and investment advisers.  New initiatives for 2016 include an evaluation of broker-dealers’ and investment advisers’ liquidity risk management practices, and firms’ compliance with the SEC’s Regulation SCI, designed to strengthen the technology infrastructure of the U.S. securities markets.
3. Data Analytics – OCIE’s enhanced ability to analyze large amounts of data will assist examiners’ ongoing initiatives to assess anti-money laundering compliance, detect microcap fraud, and review for excessive trading.  Data analytics also will help examinations focused on promotion of new, complex, and high-risk products.

Other Initiatives of review:

ØMunicipal Advisors-newly registered, assessing their compliance with SEC/Municipal Securities Rulemaking Board rules

ØPrivate Placements-evaluating that their legal requirements are being met in the areas of due diligence, disclosure and suitability

ØNever Before Examined Investment Advisors/Investment Companies-a continuation of examining those federally registered RIA firms that have never been examined

ØPrivate Fund Advisers-focusing on fees and expenses and evaluating the controls/disclosure associated with side-by-side management of performance based and asset-based fee accounts

ØTransfer Agents-reviewing for timely turnaround of items and transfers, recordkeeping and retention, safeguarding assets

The 2016 exam initiatives are somewhat of a continuation of last year’s priorities and should be read carefully. I have also included both the 2015 and the 2014 exam priorities too as a good reminder for all!

Happy New Year!  With the New Year comes the requirement of filing your registered investment advisory (RIA) firm’s updating annual amendment of your Form ADV.  This requirement to file is due within 90 days of your RIA firm’s fiscal year end.  Most firms have a December 31 fiscal year end.  If so, your amendment will be due by March 31, 2016.   This is the filing where your firm will report its regulatory assets under management, types of clients, number of accounts, etc.  If you need assistance or have questions about this important filing, call Registered Advisor Services (603) 292-6772 today!

Recently, I came across an informative article written by Julia D. Corelli of the law firm of Pepper Hamilton LLP outlining what a Chief Compliance Officer of a registered investment advisor (RIA) can expect and what they should consider when their firm is examined by the Securities and Exchange Commission (SEC).  This article covers important topics such as ‘type of examinations’, the ‘exam process’ and how to ‘prepare for the exam’. I am often asked what to expect when the regulators come in to do an exam.  This article walks you through the entire process and is a must read to help your firm be prepared.

Recently, the Office of Compliance Inspections and Examinations (OCIE) published its cybersecurity exam initiative outlining their focus areas when examining investment advisor firms for preparedness for a cyber attack.  Those areas include governance and risk assessment, access rights and controls, data loss prevention, vendor management, training and incident response.  Review this important alert to see how your firm measures against OCIEs exam priorities.

The North American Securities Administrators Association (NASAA) published their coordinated exam findings of 1170 state registered investment advisers from January-June 2015 in 42 jurisdictions.  The majority of these advisers were small firms with one Investment Adviser Representative.  Of this total group, for 324 advisers this was the first time they were examined by the state regulators.  The top three deficiencies included approximately 70% of the firms examined were deficient in their books & records, 50% in contracts with their clients and 40% in Form ADV filings for their firm.  These percentages have increased since 2013.  For a complete view of their findings review the report in its entirety.  Let this help you test your firm’s compliance records to be certain you are on top of what the state regulators are looking for when they come to exam your firm.

FINRA’s 2016 Renewal Program is about to begin for registered investment advisors.  Paying your firm’s renewal fees to the individual states is an important step in keeping both your advisory firm and your Investment Advisor Representatives registered in the upcoming year.   Some states will send a notice to your RIA firm reminding you that this needs to be completed.  Other states will not.  Be Proactive!  Included here is the 2016 Renewal Program Calendar published by FINRA outlining the important dates to meet the 2016 Renewal deadlines.  Don’t wait until the last minute!  Fund your account today! Call Registered Advisor Services (603) 292-6772 if you would like assistance with this important requirement.

The Office of Compliance Inspections and Examinations (“OCIE”) recently published a risk alert on the growing trend of investment advisers outsourcing the role of the Chief Compliance Officer (“CCOs”) in their firms.  Briefly, of the 20 examinations completed the staff found that a lack of communication left the CCO without a good understanding of the registrant’s businesses, operations and risks.  CCO’s that serve for numerous affiliated firms did not have sufficient resources to perform their compliance duties; and, CCO’s who relied on the records selectively provided by the registrant may have affected the accuracy of the CCO’s annual review on behalf of the registrant.  If you are considering outsourcing this position, I encourage you to review this risk alert in its entirety.