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How to Find a RIA Compliance Consultant


Registered investment advisors (RIAs) must adhere to a multitude of regulations and compliance requirements. Staying on top of these ever-evolving rules and regulations can be a daunting task and failing to adhere to them can result in significant penalties. This is where a RIA compliance consultant can help. Let’s break down what these professionals do, why you may consider hiring one for your RIA and tips to find one.

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What Is a Compliance Consultant?

A compliance consultant is a professional who specializes in helping RIAs navigate the complex landscape of regulatory compliance. They possess expertise in various financial regulations, including those set forth by the Securities and Exchange Commission (SEC) and state regulatory bodies. Compliance consultants assist RIAs in developing, implementing and maintaining effective compliance programs tailored to their specific needs.

These experts ensure that RIAs remain in strict adherence to all applicable laws and regulations, minimizing the risk of legal issues, fines and reputational damage. They may be able to offer guidance on compliance policies, help an RIA complete its SEC registration, conduct periodic audits and help address other compliance-related concerns.

Why RIAs Should Consider Hiring a Compliance Consultant

The owner of an RIA shakes hands with a compliance consultant after hiring her firm to provide compliance services.

An RIA may hire a compliance consultant for a variety of reasons related to the expertise, services, resources and peace of mind these professionals can offer. Here are five common reasons to consider:

  • Expertise: RIA compliance consultants bring a deep understanding of the intricacies of financial regulations. Their expertise helps RIAs avoid costly mistakes and ensures they stay compliant.
  • Risk mitigation: Compliance violations can result in severe consequences, including financial penalties, damage to an RIA’s reputation and even criminal charges. A compliance consultant helps mitigate these risks.
  • Time and resource efficiency: Compliance management can be a time-consuming and resource-intensive task for RIAs. By outsourcing this responsibility to a compliance consultant, RIAs can free up their time and resources to focus on their core competencies: Managing investments and serving their clients. 
  • Customized solutions: Each RIA is unique, with specific compliance needs. A compliance consultant tailors solutions to address the specific regulatory challenges an RIA faces.
  • Staying ahead of regulatory changes: Regulations in the financial industry are continually evolving. Compliance consultants are dedicated to staying ahead of these changes, ensuring that their clients remain compliant with the latest rules and requirements. This proactive approach can save RIAs from last-minute scrambles to adapt to new regulations.

Where to Find a Compliance Consultant

A compliance consultant holds a training session on new compliance regulations with a financial advisor.

You’ve decided you need to hire a compliance consultant, but how do you go about finding the right one for your specific needs and how can you connect with one? Here are three common areas where you can begin your search:

Industry Associations and Networks

One of the best places to start your search for an RIA compliance consultant is within industry associations and networks. Organizations such as the Investment Adviser Association (IAA) or the National Society of Compliance Professionals (NSCP) can be valuable resources. 

These groups often maintain directories of experienced consultants, making it easier for you to find a qualified professional. For example, the NSCP has a vendor directory that lists a number of consulting and compliance firms. 

Online Directories

The internet is a treasure trove of information, and there are various online directories and databases that list compliance consultants. The Financial Industry Regulatory Authority (FINRA) maintains what it calls its Compliance Vendor Directory, which RIAs can be access with a FINRA login. Other websites like Regulatory Compliance Watch also maintain lists of compliance firms 

Recommendations from Peers

Networking within the industry can yield excellent recommendations. Reach out to other RIAs or financial professionals you know and trust. They may have firsthand experience with consultants who excel in RIA compliance and can provide valuable insights.

Tips for Hiring a Compliance Consultant

When you’ve narrowed down your search and found a potential compliance consultant, here are five common steps you can take toward getting your needs met and hiring the right professional: 

1. Define Your Needs

Before you speak with a compliance consultant or firm,  it’s essential to clearly define your compliance needs. Are you looking for assistance with specific regulatory issues, like SEC or state compliance, cybersecurity or Form ADV preparation? Having a precise understanding of your requirements will help you narrow down your choices.

2. Check Qualifications

When evaluating potential consultants, verify their qualifications and experience. Look for professionals who hold the certified regulatory and compliance professional (CRCP) designation or have other relevant certifications. Some advisors may also have law degrees, which are not uncommon. Ensure they have a thorough understanding of the specific regulations governing RIAs.

3. Ask for References

Don’t hesitate to request references from past or current clients of the consultant. Speaking with these references can provide valuable insights into the consultant’s effectiveness, responsiveness and overall professionalism.

4. Discuss Fees

It’s important to have a transparent discussion about fees and pricing structures. Some consultants charge hourly rates, while others work on a retainer basis. Make sure you understand the cost implications before making a decision.

5. Assess Communication Skills

Effective communication is key to a successful consultant-client relationship. Evaluate the consultant’s communication style and responsiveness during your initial interactions. You want someone who can explain complex compliance issues clearly and keep you informed throughout the process.

RIA Compliance Consultant vs. Chief Compliance Officer

While an RIA compliance consultant is often an external expert hired on a contract basis, SEC regulations require every RIA to have a chief compliance officer (CCO) on staff. This permanent, in-house role is responsible for ensuring that a firm adheres to legal and regulatory requirements. However, CCOs may also have other roles at an RIA firm, including working directly with clients or serving as the chief executive officer.

CCOs implement and monitors compliance programs, conducts internal audits, and serves as a liaison with regulatory bodies. This position demands a deep understanding of the firm’s operations, allowing for tailored compliance solutions.

Bottom Line

Finding the right RIA compliance consultant can significantly impact the success and regulatory standing of your firm. By exploring various sources and following these essential tips, you can identify a consultant who aligns with your specific needs and helps your RIA firm remain compliant. Remember that due diligence in your search is a worthwhile investment in the long-term success of your business.

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