For firms who are in the early stages of developing their compliance programs we provide a compliance calendar on our award-winning platform that is ready to use on day one. This template calendar is vetted by our network of consultant partners and can be customized by a compliance consultant if desired.

We have seen firms who have spent hundreds of thousands of dollars on other technologies that just did not work. That is why we work with firms as strategic technology partners on implementation, not just as a technology vendor. We have found that success in compliance has also led firms to further success in their business.

Hortz: The Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (SEC) releases regular risk alerts about its assessment of investment adviser firms and their practices. How do their risk alerts help provide guidance on the type of compliance solutions/resources needed?                                        
The SEC is openly communicative about its focuses and concerns, and these notices back those communications up. Different platforms take different approaches to evolving with compliance needs. Our philosophy from the beginning has been to solve as many compliance problems in one place as is possible, while maintaining ease of use. So, when the Division highlights a problem that we believe needs to be solved and that we can or should solve with our platform, which is when it goes into our development plans.

Hortz: What have the risk alerts been identifying currently as major areas of concern?
The number of SEC exams is definitely accelerating, and firms need to be ready. RIA firms’ fiduciary duty is at the top of the SEC’s mandate to protect investors, and we’re seeing that with increasing scrutiny of wrap fees, billing on margin and billing for cash. Revenue sharing or 12b-1 fees are also very under the microscope for conflicts of interest with fiduciary duty.

Looking a little further down the road, November 2022 is the compliance date for the new Marketing Rule. 12 months from now will be here before people know it, and compliance is top of mind for Advisers who are taking advantage of the new marketing opportunities it allows.

Hortz: How did you deliberately design your compliance technology to address issues like these and be flexible enough for future issues to come?
Our compliance technology platform is customizable, in real-time, to respond to new regulations and changes in examination focus. Software innovation and progress need to be constantly evolving to meet the industry’s changing needs and focuses. For example, we are already gearing up for the new Marketing Rule in 2022.

Meanwhile, firms we work with are increasingly being asked by regulatory bodies whether they use compliance software. Regulators are already signaling that firms will need compliance software such as this so can they safely grow their business in the future. The benefits and importance of technology to manage compliance are becoming an integral part of doing business for RIAs.

Hortz: How does all this improve a firm’s corporate resilience and relationships with customers, staff and stakeholders?
Bartine: It is hard to emphasize too strongly that how you implement compliance management is a critical strategic decision. Your choice in compliance tech will have an impact on your business, and the right decision will significantly reduce your risk, proactively help you manage new regulatory changes as they become a priority, reduce stress among your staff and give you something positive to share with your clients.

How you talk about your compliance program with your clients is another conversation, but people do appreciate being protected by those who they hope to trust. Compliance done well and explained simply can build goodwill that can translate into longer, better client relationships. 

Hortz: Any other thoughts or recommendations you can offer advisors on strategically implementing technology?
Bartine: We have observed SmartRIA customers demonstrating our platform to RIAs they are courting for acquisition to show them how much easier their compliance obligations are going to be. That is one of many strategic use cases that illustrate compliance technology as a business development tool for the firm.                                         

We invite advisors to learn more by visiting our Resources page and offer our firm as an ongoing, regulatory compliance resource. Our belief is that Compliance software that is easy to use and to understand has a lot of power you can use to help you grow.

Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique client/community engagement strategies. The institute was launched with the support and foresight of our founding sponsors—Ultimus Fund Solutions, NASDAQ, Pershing, Fidelity, Voya Financial and Charter Financial Publishing (publisher of Financial Advisor magazine).

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