With the increasing regulatory requirements in the investment industry, many investment advisers are turning to compliance consultants to help ensure they remain compliant. Compliance consultants conduct reviews of investment advisers’ compliance programs, policies and procedures to identify any gaps or issues. They can provide invaluable guidance on staying up-to-date with the latest rules and regulations. In this article, we will explore the key benefits of working with investment adviser compliance consultants and what to look for when selecting one. Proper compliance is crucial for investment advisers to avoid regulatory fines and penalties. Utilizing experienced compliance consultants is an effective way to strengthen compliance practices.
Compliance consultants help assess overall compliance framework
A key service that investment adviser compliance consultants provide is conducting an overall assessment of an adviser’s compliance program. This involves reviewing all compliance policies and procedures to ensure they are reasonably designed to prevent violations. Consultants will check that key compliance requirements are covered, such as SEC registered adviser requirements, state-specific rules, custodial guidelines and more. They can help identify any gaps or inconsistent practices that need to be addressed. Having an independent expert evaluation of compliance frameworks provides advisers assurance they have strong controls in place.
Experts at updating programs for latest rule changes
The regulatory environment is constantly evolving, and investment advisers must ensure their compliance programs stay up-to-date. Experienced compliance consultants are experts at tracking regulatory changes and updates impacting investment advisers. They can quickly identify new requirements advisers must implement and recommend enhancements to existing policies and procedures. Consultants save advisers time by translating complex rule changes into practical updates across the compliance program. Their expertise allows advisers to feel confident their programs meet current expectations.
Assist with regulatory exams and investigations
When examiners or enforcement investigators come knocking, compliance consultants can provide invaluable assistance to advisers. Consultants are familiar with dealing with regulators and the examination process. They can help advisers prepare for SEC, FINRA or state examinations by getting files ready, planning presentations and more. For investigations, consultants support responding to document requests, interview preparation and negotiating potential settlements. Their expertise allows advisers to put their best foot forward and mitigate potential penalties.
Provide ongoing and periodic compliance reviews
In addition to ad hoc project work, many investment adviser compliance consultants provide periodic compliance review services. This involves regular testing throughout the year or quarterly to check that policies and procedures are being properly implemented. Consultants sample transactions, perform employee file reviews, observe sales practices and more to verify compliance. They provide gap analysis reports to advise on any issues discovered that need remediation. Ongoing monitoring by consultants supplements advisers’ internal resources.
Assist with compliance education and training
Another area where compliance consultants provide value is developing education programs for investment adviser staff. Consultants can create customized training materials tailored to the adviser’s specific needs. Training assists staff in understanding their compliance obligations and how to comply day-to-day. Consultants can also answer employee questions and investigate compliance hotline reports. Their training improves staff compliance capabilities and reduces organizational risk.
Utilizing experienced investment adviser compliance consultants provides invaluable expertise and resources to strengthen compliance programs. They deliver assessments, ongoing monitoring, training and regulatory support to allow advisers to feel fully prepared. Compliance consultants are an important partner to leverage in meeting the increasing regulatory demands. With their assistance, advisers can have greater confidence their compliance program will satisfy examinations and allow them to focus on serving clients.