As the new business year begins, many firms are constructing their compliance budgets and initiatives for 2007. A tool we feel can be vital for measuring your firm’s compliance barometer is to hire an outside consulting firm to conduct mock examinations or training audit. Such a visit from an outside consulting firm, such as RIA Compliance Consultants, can provide numerous benefits for a firm, regardless of its size. A mock examination provides an objective look at the compliance and regulatory structure of your advisor firm. It can help assess whether or not your firm is prepared for an actual regulatory visit and what the firm needs to do to shore up its compliance policies and procedures. Such a visit also provides an opportunity to receive training from an outside expert who is focused on helping advisor firms meet their fiduciary and regulatory responsibilities. It can also be integrated into your firm’s assessment of its internal policies and procedures. It indicates to regulators that the firm is committed to a culture of compliance.
Category Archives: Regulatory Inspections
The 5 Most Common Investment Advisor Deficiencies in 2005
March 18, 2006
Lori Richards, Director of the SEC’s Office of Compliance Inspections and Examinations, recently gave a speech at the Investment Adviser Compliance Summit and provided some interesting insights into the current SEC examination process and lessons learned from exams completed in 2005. Based on the approximately 1500 SEC examinations completed last year, these five items were cited as the most common regulatory deficiencies of investment advisors.
NASAA Report on State Investment Advisor Exams
November 12, 2005
Back in September, the North American Securities Administrators Association (NASAA) released a series of recommended best practices for state advisor firms’ compliance programs. The best practices are a result of a NASAA sweep and subsequent report completed and released this year. According to a NASAA press release, the following are recommended best practices:
SEC Re-Considering Advisor Exams
November 06, 2005
Recently there have been several reports in various industry publications such as The Wall Street Journal and the Compliance Reporter discussing changes the SEC is making to its risk-based approach for advisor firm audits. While the SEC has not finalized the changes, it appears they are close to implementing an approach that would more actively monitor “low-risk” firms. Currently, the SEC divides advisor firms into “high-risk” v. “low-risk” firms with high-risk firms visited on a more frequent and regular basis. According to comments from the SEC, they would randomly select a sampling of low-risk firms each year as opposed to visiting low-risk firm once every five years. Depending on the type and severity of deficiencies found at the low-risk firms, the SEC may move away from visiting high-risk firms more frequently and audit all firms on a more balanced approach.
