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Compliance Challenges that keep Executives up at Night

Are you the owner of an RIA?

Are you worried about market volatility?

Are you worried about a potential market downturn and the impacts it will have on your revenue?

Are you afraid of the cybersecurity or lack thereof in your firm… and how someone could expose you and all of your clients data?

Are you thinking about the competition and all the other businesses out there that clients can choose over you?

Do you wonder what will happen to your business if you’re not there to run it?

Are you used to having a consultant and an attorney that barely talk to each other… or to you!

There’s a lot of compliance challenges to worry about.

Our outsourced compliance department is the solution for you.

In this article, we’re going to unpack some of the biggest compliance challenges that businesses are facing today.


Real-World Compliance Struggles of RIA Firms

As a Registered Investment Adviser, you are faced with a ridiculous amount of compliance requirements that you just don’t have time to keep up with. It’s a major distraction from running your business.

From keeping up with constantly evolving regulations to managing the internal burden of compliance, it’s no wonder so many RIA owners feel overwhelmed.

Here are some of the top compliance challenges we often hear from our RIA clients:

Preparing for a big exit – They want to sell their business, but know they need to clean up any lingering compliance issues first.

Wearing too many hats – The RIA owner gets saddled with the Chief Compliance Officer role, despite lacking the expertise or bandwidth to do it properly.

Unsatisfactory service from current providers – Their compliance consultant or attorney just isn’t responsive or proactive enough.

Failed audits – After using a compliance consultant, they still had glaring deficiencies uncovered during a regulatory exam.

Compliance fatigue – The endless stream of new rules, testing requirements, and paperwork has them feeling burned out.

Staffing struggles – They’re having a hard time recruiting and retaining qualified compliance professionals.

Sudden CCO departures – When their Chief Compliance Officer leaves, they’re left scrambling to find a replacement and keep up with the workload.

Siloed services – Their compliance consultant and attorney don’t communicate well, leaving gaps and inconsistencies.

Overconfidence in the status quo – They think their compliance is fine, until we uncover major issues like lack of testing or incomplete client contracts.

The list goes on, but the common thread is that compliance has become a major headache for RIA owners. Trying to juggle all these obligations in-house can lead to costly mistakes, failed audits, and undue stress.

That’s where our outsourced compliance solution comes in. Offload this burden so you can focus on serving your clients and growing your firm.

compliance pain points and challenges infographic


Keeping Up with the Latest Rule Changes Affecting RIAs

Just when RIA owners think they’ve got a handle on their compliance obligations… everything changes again!

Amidst the endless stream of new rules and requirements, staying ahead of the curve really is a never-ending battle.

Several significant regulatory changes are on the horizon that RIAs need to be prepared for.

For starters, the SEC and FINRA are proposing new rules that would compel firms to implement anti-money laundering (AML) programs and documented business continuity/succession plans.

CCOs also have to be aware of other regulating bodies that pass regulations that impact the RIA and BD worlds. For example, the FTC recently finalized a ban on non-compete agreements that will impact hiring and retention strategies.

So not only do they have to keep up with the SEC, FINRA, the FTC…

But also:

  • The Department of Labor
  • State securities divisions
  • State and federal privacy laws
  • and more

With so many moving parts, RIAs can quickly become overwhelmed.

You NEED a lawyer to get this work done.

That’s why having a trusted legal partner in your corner is essential for ensuring you’re prepared for whatever new rules come down the pipeline.


Critical Legal Considerations for Scaling RIA Firms

Once you’re out of the startup phase and you’re in that growth phase, you’re in a position where you might start to think about bringing more services in-house.

The diverse legal requirements that come with scaling a successful advisory business extend far beyond just keeping up with the constantly changing compliance landscape.

From contract reviews and revisions to mergers and acquisitions to complex employment matters, RIA owners quickly find themselves in need of an experienced general counsel to serve as a strategic partner.

Finding the right legal fit can be a major challenge. One that A LOT of firms struggle with.

You might not need a full-time attorney.

But you have legal needs that are going to come up.

Month after month.

You need someone in your corner that’s going to tell you exactly what you need, versus trying to handle it all on your own or bouncing between different legal providers.

Our integrated compliance and legal services provide RIA firms with seamless access to a team of securities attorneys and compliance experts. This not only ensures all bases are covered, but also enables tight coordination between the firm’s compliance and legal functions.

The end result is a more efficient, cost-effective, and responsive support system that empowers RIA owners to focus on growth.

The Outsourced Compliance Advantage

Like we said… There’s SO MUCH to consider.

As RIA firms navigate the ever-evolving compliance landscape, our outsourced compliance department offers a distinct competitive edge.

Rather than trying to build and maintain an in-house compliance function, advisers can leverage the expertise and resources of our entire outsourced compliance department.

At the heart of this outsourced model is an experienced compliance manager who can serve as the firm’s Chief Compliance Officer (CCO).

This seasoned professional leads a team of analysts and subject matter experts, ensuring all aspects of the compliance program are expertly managed.

The SEC actually PREFERS to work with dedicated compliance professionals. So an outsourced compliance model can really simplify the audit and examination process.

Examiners know they’re dealing with a team that lives and breathes compliance, versus a part-time CCO who’s juggling multiple responsibilities.

Beyond the regulatory benefits, the outsourced compliance approach also offers RIA firms a cost-effective and scalable solution. Firms can access comprehensive compliance expertise without the overhead of maintaining an in-house department – a critical consideration as the business grows.

Trying to build and manage compliance on your own is a major distraction from your core business.

Outsourcing allows you to keep your focus where it should be: on serving clients and growing your firm.


The Need for a Trusted Compliance Partner

We get it.

Between market compression, market volatility, increased regulation, and worries about the future of the firm — you need a partner you can trust, one that understands the unique challenges you face as an entrepreneur.

While traditional compliance consulting services may provide a temporary Band-Aid, they often fall short of delivering the dedicated attention and industry-specific expertise that RIA firms truly require.

The holistic approach at My RIA Lawyer serves as an extension of your business, providing the peace of mind that comes with knowing critical compliance and legal matters are in capable hands.

Know that you’re not alone in this. You’ve got a partner in us.

Contact us to discuss your compliance challenges

Author Bio

Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.

Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.

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