Advisory firms should follow Registered Investment Adviser compliance to create a regulatory framework. A CPA firm offers RIA compliance assistance, and this helps prevent firms from violating security laws. Here is more information about why growing advisory firms require RIA compliance services:
Compliance Program Developer and Support
RIA compliance requirements include recordkeeping, personnel supervision, disclosure requirements, and fiduciary duty standards. Using RIA compliance services to install an appropriate framework helps prevent financial penalties and regulatory action. A CPA team assists with compliance program development and drafting the framework; this includes creating the written compliance manuals and calendars to help meet deadlines. Having an appropriate framework in place helps with stronger cybersecurity protocols, adequate oversight of solicitor relationships, and appropriate fee billing practices.
SEC Registration Assistance
Depending on the firm’s size, Registered Investment Advisers are required to follow registration requirements for a state securities regulator or with the Securities and Exchange Commission. The type of business, amount of assets under management, client base, and business activities also impact requirements. Firms with 100 million or more in assets register with the SEC. A CPA team can assist the firm through the process, and they help with registration requirements by creating documents, such as Form ADV. The team also works on drafting policies, including the Code of Ethics, BCP, and Insider Trading Policy. Other assistance includes reviewing solicitor statements and disclosure agreements. This allows the firm to meet SEC application requirements.
Advisers are required to submit SEC applications through the IARD system. A CPA team can help prevent registration delays by checking the supporting documentation, and they are able to respond to follow-up inquiries made by the SEC. They can help Exempt Reporting Advisers, who are responsible for anti-fraud rules, with the federal registration process.
Chief Compliance Officer Support
A CPA team offers ongoing compliance support to the Chief Compliance Officer; this includes administering the IARD system and filing annual and amended Form ADV updates. Compliance program maintenance also includes collecting representative disclosures and certifications, monitoring trading policy, and reviewing adviser advertising. Receiving this assistance allows the firm to meet deadlines, as RIA compliance services include delivering a Form ADV Part 2 within 120 days of the end of the fiscal year. The team is able to file forms for the firm, including:
- Amended form ADV
- State filings
- Section 13 filingsÂ
A consultant can also act in a Chief Compliance Officer role for growing firms. The CCO collaborates with management and staff, and they assist with organizing regulatory compliance meetings. CCOs may offer internal training and conduct an annual risk assessment.
Review Assistance
SEC-registered advisers should review their firm’s compliance program at least once a year to assess its effectiveness and document the review. This includes noting any compliance issues that may have arisen and any business regulatory changes. A CPA company is able to offer a comprehensive annual review to help RIAs meet compliance requirements, completing a risk assessment that is customized to the firm’s business model to check procedures and controls. They review any conflicts of interest and check policies that protect client information. Other areas include client fee assessments, testing allocation methods, and making sure the firm is upholding financial integrity standards to prevent money laundering.
The process includes a policy and procedure review and a books and records testing to find gaps and check compliance effectiveness. Personnel interviews allow the team to see if there are any operational weaknesses. Exit interviews include a discussion about findings; the team provides recommendations on how to improve. A final report summarizes the findings and offers additional details, providing action steps for the firm to follow. Mock exam services provide insights into how real regulatory audits are run. This allows the firm to identify vulnerable areas. Having more information about what to expect helps firms to address potential issues before the exam and improve controls.
Learn More About RIA Compliance Services
Investing in RIA compliance assistance allows the firm to receive information about its specific regulatory requirements. A CPA company is able to help with accounting tasks for small to medium firms; this includes oversight of accounts receivable and preparation of billing. To learn more about RIA requirements, find a company that provides RIA compliance services today.