Compliance is essential for firms of all sizes. However, as threats evolve and the need for vigilance intensifies, staying on top of compliance can feel like an overwhelming task. That’s especially true for RIA firms that may have limited resources to dedicate an employee to full-time compliance management.
Vendor-built technology, including customer relationship management (CRM) software, pre-populated forms, portfolio management systems and workflow management software, can be an RIA’s greatest asset in staying ahead of compliance risks and providing a high-quality (and secure) experience for clients.
Reduce Audit Risk
Audits are crucial for maintaining compliance. When firms are prepared and have robust compliance practices in place, audits are non-eventful. However, firms that fall behind in their compliance efforts often find audits to be time-consuming and expensive, pulling resources away from other client-facing tasks to correct mistakes.
Vendor technology integrates compliance management into the financial services compliance tools, making it simple for RIAs to stay on top of changing regulations and streamline their compliance efforts. Those processes pay off — firms using vendor tools report fewer audit exceptions. That’s because vendor technology is proven and integrated, creating an audit-ready single source of truth that ensures data is consistent and in compliance. Robust vendor technology leaves an audit trail with each client interaction and transaction, ensuring that records are properly stored and organized so they can be easily accessed when needed during an audit.
Stay Up to Date with Changing Regulations
Financial services regulations are continually changing, often to keep pace with new technology and evolving threats. According to recent surveys, the biggest compliance concerns for RIAs are AI and predictive analytics.
To stay compliant, RIAs must stay on top of the regulations. They can’t rely on doing things the way they’ve always been done because compliance is an evolving process. Even a practice that was in compliance a few years ago could be flagged in an audit today if it doesn’t align with current regulations.
Instead of manually having to update software and change processes, as would typically be required with in-house technology, vendors automatically update systems with SEC/FINRA rule changes. That means RIAs can rest easy, trusting that their proven technology will adapt with changing regulations instead of having to track changes and make updates manually. The result is RIAs who can focus more time on clients and less time on managing software or stressing about compliance changes.
Simplify Compliance Management
Small RIA firms or solo advisors can easily spend numerous hours a week managing compliance (some experts estimate solo RIAs spend up to 40% of their time on compliance-related tasks). Leveraging vendor-built RIA compliance software can simplify processes and significantly reduce hands-on compliance activities without sacrificing quality.
Vendor technology is robust, proven and integrated, so compliance efforts are spread throughout the firm, not on a single type of task. These platforms streamline and often automate compliance activities, ensuring data is accurate, documents are stored properly, and RIAs are following the most current regulations.
Strong compliance processes build confidence and reduce legal risk. Advisors and back-office staff can feel confident that their firm is adhering to regulations, and clients can be assured that their information is secure and protected.
Firms often fall into the trap that building technology in-house is the better option. However, vendor technology is far superior when it comes to essential compliance processes. Using trusted vendor-built tools frees RIAs from the stress of complex compliance management, allowing for smoother audits and more time to spend with clients.
For integrated technology for RIAs, there’s no better option than Docupace. Purchasing software provides instant access to top-tier compliance processes and automatic updates. Buying a product allows you to rest assured that you have the best product and can focus on what matters most: your clients.
When you’re ready for new software, turn to Docupace for a full-service, integrated platform. Click here to download our Buy vs. Build guide to see how smart firms move faster with less risk.
