Compliance Doesn’t Mean The Same Thing To Everyone

What does compliance mean to you? To me, as a compliance nerd, it means working within your business to protect you, your firm, your advisors, and your clients, all while keeping up to date with new regulations and applying them in a way that helps your business grow.

I was chatting to a firm owner the other day, and when I asked how much their budget for compliance was, they told me it was $150/month. For that much money, I can’t even take my family out to dinner once a month, and you’re expecting a comprehensive and strategic application of compliance in your business for that much? That is because for many firm owners, compliance just becomes a checklist item. A checklist item that bottlenecks their business growth, and actually costs more money than it saves them when it comes time for regulatory examinations (think looooong deficiency letters).

So are you going to let compliance just be a regulatory box that you check, before getting caught out down the line because you weren’t supervising the quality of the work that was being done? Or are you going to invest in securing top talent and integrating compliance within your business culture so that you continue to retain clients and attract better advisors?

Key Updates:

• Enforcement actions are back to a regular schedule now, with an emphasis on any activity causing client harm
• New faces welcomed to the SEC including: Kevin Muhlendorf (SEC Inspector General), Erik Hotmire (Chief External Affairs Officer and Director of the Office of Public Affairs), Kurt Hohl (Chief Accountant), Brian Daly (Director of Division of Investment Management), Jamie Selway (Director of Trading and Markets)

My Take:

Despite a slower start to 2025, things are business as usual at the SEC. If you’d been putting off compliance issues because things were quiet on the regulatory front, I wouldn’t hold off on them any longer. Priorities for 2026 are already being discussed, and with client harm being in the spotlight for this version of the SEC, now is a great time to focus on your client experience and ensure that your clients are confident in your ability to manage their assets with their best interests in mind.

Ask Leila

Q: What Compliance Tech Do I Really Need?

A: If all of the above sounds like a headache to research and pay for each year, then I’ve got some great news. My RIA Lawyer has been working behind the scenes to build our own compliance tech, and we are now offering this to all of our Outsourced Compliance Department clients, as part of our regular service fee. So if you’re sick of having to pay for a provider, and then pay the subscription fees for their preferred tech on top of that, why not have a chat with us and see if we can help? Send me a reply with “TECH” and we’ll get the conversations started.

Responsible Entrepreneurs

This is a reminder that responsible entrepreneurs audit their vendors. As a firm, you are responsible for the vendors that you use, and as such, you need to be doing your due diligence researching your vendors. I recently had a conversation with a firm where one of their promoters wasn’t licensed in the state where they operated. This would have caused major headaches and potential fines if they hadn’t sorted things out quickly. If things are slowing down over the summer, one thing I would add to your to-do list is vendor due diligence. Don’t just take their word for it; protect your firm and your clients.

Snapshot

Have you seen? My RIA Lawyer has made headlines with our on-demand compliance training solutions that are tailored to the needs of the industry as a whole. You don’t know what you don’t know, so it’s time to get learning, because not knowing isn’t an excuse that the regulators accept. If you’d like to find out more about this training and access our free basic modules, then go here. Or read the full article here.