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Tuesday, May 15, 2018

Tips To Boost Your RIA Compliance Program in 2018

By Cory Roberson, Principal at RIA Review and RIA Consults

Are you a Start-up or Breakaway Advisor?

As a new advisor, you’ve probably moved past the initial stages of registering your RIA with the Securities & Exchange Commission (“SEC’) or a state jurisdiction.  The process, combined with tax season, likely created a barrage of new paperwork burdens.  Now, while the summer season approaches, could be great time to evaluate your firm’s annual and ongoing compliance obligations.  

At some point, more paperwork will be required by examiners whether you are a U.S-based traditional advisory practitioner, robo-advisor, or a budding crypto hedge fund practice.  

The following is a list of general guidelines that your firm can use to create a compliance program for ongoing reporting purposes.  This list is not an exhaustive group of requirements that may/may not apply to your practice.

Post Registration: within the first year and afterwards

Generating Forms/Templates:

Agreements consist of investment advisory, financial planning, consulting, private placements, and/or solicitor relationships between the firm and the client.  A solicitor arrangement will also require a disclosure statement and the delivery of an ADV 2A/B brochure to the client.

Business Continuity Plans include a summary of procedures that would apply during a standard business disruption (emergency) and/or a reference point of key vendors to contact as a safeguard to continue firm operations.

Policies & Procedures Manuals include a summary of standard compliance provisions for adhering to the SEC Investment Advisors Act and/or similar state rules.

Privacy Policy Notices contain a summary of disclosures in alignment with the Federal Trade Commission (FTC), Gramm-Leach-Bliley Act, and the Securities and Exchange Commission’s (SEC) provisions on the safeguarding of client information.  Ref. Reg. S-P.   

ADV Offer Letters are a required component of annual brochure rule requirements for client delivery purposes. Ref. SEC Rule 204-3 (and similar state rules).  

Client Onboarding Process:  for new account opening procedures

Sending Documentation:

Agreements/Brokerage Forms must include a signed copy of a service agreement(s) (including associated fee schedules) and new account paperwork to execute legal arrangements of services offered.  Signatures should be from the client and firm principal/authorized representative.

Financial Planning Engagement Letters (for Certified Financial Planners or CFP’s) should include an overview of financial planning services.  Contents of the engagement letter can be included with the financial planning agreement.  

ADV Part 2A/B brochures include a comprehensive overview of the firm’s business, services, and required disclosures.  Clients and prospects should receive a brochure on or before the time of agreement.

Privacy Policy Notices include a summary of provisions for the safeguarding of client information in alignment with Reg S-P, Reg S-ID, and GDPR for European clients/residents.  

Business Continuity Plans can be offered or delivered in summary format to clients using a print or electronic format.  Ref. 260.238.3 - California firms.

Advertising materials include circulars, newsletters, performance data, reports, and/or investment analysis summaries.

Investment Policy Statements contain information about a client’s risk profile, investment objectives, and preferences in alignment with SEC, state, and or FINRA investment suitability provisions. Ref. SEC Rule 204/205/206 and FINRA Rule 2111.

Client Notices – 120 days after fiscal year—deliver annually

Offer letter can include:
ADV brochure or summary of material changes in print or electronic format*.
Privacy Policy Notice should be delivered in print or electronic format*.
Business Continuity Plan summary should be offered or delivered in print or electronic format*

*Obtain permission from client (authorization form) if selecting electronic delivery method.

Annual Renewal Fees Dueusually due on/around second week of December

State Fees:
Preliminary Renewal statements released in November annually.
Firms can pay via CRD/IARD E-bill (link checking account) or a check to FINRA.

Annual Review (required by SEC and some states):  at least once a year

Procedures Review includes checklists or other documentation that demonstrates the testing of the compliance program and its effectiveness.  

Chief Compliance Officer (CCO) summary includes a checklist or other documentation that details the supervision of firm procedures by the designated Chief Compliance Officer.

Risk Assessment contains an overview for the identification of firm risks and the mitigation process for handling them.  

Common items to update for clientsduring/after first year

 Privacy Policy Notice

 Business Continuity Plan
 Investment Policy Statement
 Service Agreements (services/fees)
 ADV Part 2A/B Brochure

Haven’t started on the registration process yet?

Consulting resources are available for entrepreneurs that are seeking to register with the SEC or a state jurisdiction.  In addition to consulting services, we offer an online compliance management software for ongoing management purposes. 

Try a version for access to more in our compliance management system: RIA Review.  

Compliance and Business Management

FIN Compliance ( is a consortium of compliance services including: RIA Consults-Roberson Consults Group, a compliance consulting firm, RIA Review, a compliance-management software tool (SaaS), B-D Review, a RIA/Broker-Dealer compliance management software tool, and FINLancer is a business management portal featuring:  E-signature tools; Invoicing integration, Vendor Directory, continuity directory*, business client document portal, and more (available by Q3 2019).  Access all services on one site:


FIN Missions ( provides business support group sessions for other entrepreneurs.  In addition, Cory has volunteered for more than fifteen youth programs in locations such as like S. Korea, China, S. Africa, Thailand, and India.

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