Welcome everyone! Welcome to the 441st episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Leila Shaver. Leila is the founder of My RIA Lawyer, a compliance and legal services firm based in Alpharetta, Georgia, that serves RIAs, broker-dealers, and other financial services companies.
What’s unique about Leila, though, is how she helps firms navigate the increasing compliance burdens that can arise as they grow in size and complexity to ensure they remain in line with the requirements of their relevant regulators.
In this episode, we talk in-depth about how Leila has found that the time firms need to spend on compliance can vary based on their size (with solo advisors possibly only needing to spend a couple of hours per month and increasing as they add more employees), how Leila finds that firms tend to start looking for outsourced compliance solutions once they reach approximately $500 million in AUM (based on the growing complexity of the firm and the increased time needed to devote to supervision and other compliance tasks), and why Leila thinks that it’s not unreasonable for larger firms to spend 5–10% of their annual revenue on compliance (whether by hiring a sufficient number of internal compliance professionals and/or engaging an outsourced solution that can fully understand the firm’s operations).
We also talk about how Leila finds that while there are similarities between broker-dealer and RIA compliance (for example, in terms of practical testing requirements) many advisors who transition to the RIA model find that compliance is often less burdensome, how Leila sees broker-dealer compliance under FINRA as more rules-based and prescriptive while RIA compliance under the SEC is more principles-based (leaving greater room for interpretation on the part of the firm), and how Leila thinks that firms can benefit from working with a lawyer on compliance issues in order to not only get compliance guidance, but also actual legal advice when needed.
And be certain to listen to the end, where Leila shares why it’s valuable for firms to keep their compliance professionals in the loop when business planning to ensure potential time and/or hard dollar compliance costs are kept in mind when considering new initiatives, why Leila’s firm is building technology tools to both capture books and records needed for compliance but also ease the supervisory burden of compliance professionals, and how Leila has found many similarities between building an advisory business and a legal services firm, including the importance of having a differentiator in the marketplace and the time (and effort) it can take to build a successful practice.
So, whether you’re interested in learning about what it takes for RIAs to stay compliant with relevant regulations as they grow, the differences between RIA and broker-dealer regulation, or how to decide whether to handle compliance responsibilities in house or to hire external support, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Leila Shaver.
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