RIA Compliance Checkup. As we enter the third quarter of 2018, now is a great time to review your books and records requirements both from a state or federal investment advisory registration perspective to confirm your investment advisor firm is keeping up with your ongoing review requirements. Here are some areas to review and thoughts to consider as you perform your firm’s RIA Compliance Checkup:
- Are your Investment Advisor Policies and Procedures up to date? SEC Rule 206(4)-7 requires that you have policies and procedures in place that fit the advisory firm’s current business practices. Perform a review and determine if any policies need to be updated or revised for how your RIA firm now operates.
- Custody Rule 206(4)-2-do you have custody of any of your client’s cash or securities? Have you or any of your Investment Advisor Representatives become a Trustee of a client trust account? Are you using your client’s user id and password to access their account to place trades? These are just two examples of how investment advisors may have custody of client cash or securities. Review your RIA firm practice in this area to determine if custody comes into play.
- Code of Ethics Rule 204A-1-have you obtained the annual attestation from all of your access persons? Have you obtained your access persons quarterly brokerage statements or transactions and holdings reports? Are there any issues with gifts received by your access persons from clients or otherwise? Again, all suggestions of what to consider when thinking about your investment advisory firm’s compliance with the Code of Ethics.
- Risk Assessment-has your registered investment advisory firm entered into any new engagements that has created risk for the firm? If so, what have you done to mitigate the risk; and, has that risk been properly disclosed within your Form ADV Part 1 and ADV Part 2A Brochure?
- Client Agreement Review-have you performed a review of your signed client agreements to confirm that what your clients are being charged is consistent with what is spelled out in the client agreement?
- Are all of your investment advisory entity documents up to date and in good order? Have address changes been made with the appropriate corporate authority to ensure your documents are current?
- Are all your Investment Advisor Representatives Form U4s up to date and current with outside business activities and address changes? Do any of the outside business activities create a conflict of interest for the firm?
This list is by no means exhaustive! There are many other areas that require an investment advisors attention in order to complete a thorough review of your books and records requirements. Complete your RIA Compliance checkup today! If you have questions or need assistance with compliance, contact Registered Advisor Services for a free consultation.
