I have been asked if outsourced compliance for RIA firms is a good thing to do. My short answer to that question is, it depends?
By that I mean, for larger, multi-employee RIA firms outsourcing some, or all of the compliance functions, may not be the most efficient and prudent thing to do if the firm has both an in-house legal and compliance department.
But, if your advisory firm is small, for example, ten employees or less, then outsourced compliance is going to be very beneficial for your firm. A good outsourced compliance firm will be able to partner with your RIA firm, understand your business model, confirm that your Form ADV Part 1 and Brochure are all in good order and in compliance with both the federal and state requirements (as applicable), and make sure your firm’s compliance manual is current and up to date with all the books and records requirements at both the state and federal level.
Ongoing, your outsourced compliance for RIA firms consultant can help your investment advisory firm with:
- Compliance with all the books and records requirements of either the individual states where the firm is registered, or in compliance with the Investment Advisers Act of 1940 for federally registered firms;
- Information and guidance concerning new rules from either the state or federal regulators;
- Annual amendment filing due to be filed within 90 days of your firm’s fiscal year end;
- Annual re-registration of the firm and its Investment Advisor Representatives (IAR);
- Provide testing documents to help your firm meet the testing requirements of your policies and procedures;
- Advertising review of your website and marketing materials;
- Amend your Form ADV Part 1 and Brochure/Brochure Supplement, as needed, throughout the year;
- Prepare and file Form U4 and Form U5 filings when the firm hires an IAR or an IAR leaves the RIA firm;
- Assist the investment advisor when examined by either the state or federal regulators;
- And, your consultant should be available to you for compliance questions during the course of a year. At Registered Advisor Services, we partner with registered investment advisor firms for ongoing compliance services to help with all of these important requirements. Call us today for a free consultation!
