Numerous regulations exist in the world of RIA compliance — the fiduciary responsibilities, best practices, and continually updated standards that all registered investment advisors (RIAs) must follow. Your RIA or financial advisory firm must be mindful of these regulations, making sure you are both aware of and keeping up with the latest industry updates.
Your IT provider can play a key role in helping you keep on top of RIA compliance. They can offer the expertise and resources to ensure your technology is up to date and secure, as well as manage risks in various areas of your business.
What your IT provider should do
Your IT provider should play an active role in helping you understand the current regulations and implement appropriate technology solutions. In particular, they should be able to do the following:
Understand the IT requirements of the SEC
The Securities and Exchange Commission (SEC) has a number of IT requirements that RIAs must strictly adhere to. These include the use of secure storage systems, encryption of sensitive data, and retention of data for a specified time.
A good IT provider will be familiar with the SEC’s requirements and be able to help you understand your obligations. They should also be able to provide guidance on how to configure and use technology in order to comply with these regulations.
Remain up to date on SEC changes
The SEC regularly updates its regulations, introducing new or revised guidelines and requirements. Your IT provider should be proactive in monitoring these changes and informing you about how they might affect your business. They should also be able to provide strategic advice on how to best prepare and respond to the changes.
Implement technology solutions to help with compliance
Solutions like automated compliance monitoring, document management systems, and data security technologies can all help to ensure that your RIA or financial advisory firm is in compliance with regulations. Your IT provider should be able to advise you on the best solutions for your business and provide technical support in implementing them.
For example, SEC Rule 17a-4 requires firms to store certain records in a non-rewriteable, non-erasable format for a minimum of three years. Your IT provider can help you meet this rule by setting up a secure archiving system with appropriate retention policies.
| Related reading: Understanding SEC email compliance rules for RIAs |
Provide recommendations for best practices
In addition to implementing the necessary technology solutions to comply with regulations, your IT provider should be able to recommend best practices that protect your RIA firm and its data. These could include setting up secure access controls, using two-factor authentication for logins, or regularly testing and monitoring your systems for security threats.
Another essential best practice is making sure that all staff members are adequately trained on RIA compliance and data security. Your IT provider should be able to provide training resources for this purpose, as well as help you set up internal procedures and processes to ensure that everyone is following the necessary guidelines.
Provide reporting to demonstrate compliance
Finally, your IT provider should be able to provide regular reports that demonstrate your RIA firm’s compliance with regulations. These reports should include details about the security measures you have in place, such as any audit trails or data backup history, as well as the results of any compliance checks that have been performed.
If your IT provider has implemented any specific solutions to help with compliance, such as automated compliance monitoring tools, they should be able to provide detailed reports about the results. This will help you demonstrate to regulators that you are taking steps to meet the necessary standards and remain in compliance.
How RIA WorkSpace can help with RIA compliance
We at RIA WorkSpace have the expertise and resources to help you keep on top of RIA compliance. Our team of experts has extensive experience in building secure IT systems that meet the latest industry standards, as well as providing advice and guidance on best practices for data security.
We also offer a range of technology solutions to help you comply with changing SEC regulations and reduce risk across your business. These include email and document management systems, backup and archiving solutions, and more.
Find out more about how we can help keep your RIA compliant. Get in touch with us today.