With regulation of the advisory industry becoming ever more complex, it should come as little surprise that planners occasionally look to outside experts for help staying in compliance.
Indeed, a whole slew of consultants have built their businesses around trying to meet this need. With the Securities and Exchange Commission’s adoption of a new marketing rule in November and its recent proposals of myriad new regulations, firms most likely have more reason than ever to tap experts on the shoulder for a little wise advice.
One of the best-known compliance consultants, RIA in a Box — which has been part of the Comply family of companies since 2021 — has released a ranking of the regulatory topics advisors most often ask about. Topping the list are questions over whether firms need to be registered with the SEC, individual states or perhaps both.
David Hunter, the owner and lead advisor at First Light Wealth in Palmyra, Pennsylvania, said the seeming ubiquity of this question is likely a reflection of the number of advisors who are breaking off from larger firms to go independent these days. Hunter said he left a well-established registered investment advisor early this year and started his business in April.
For help with the registration question, he turned to the XY Planning Network, which also offers expert advice on compliance matters. Hunter said he thinks other planners who are contemplating striking out on their own would be wise to do something similar. That goes not just for questions on registration, he said, but the host of other compliance issues advisors are likely to encounter throughout their careers.
“Unless you’re big enough to have a standalone chief compliance officer who’s also a lawyer,” Hunter said. “And even then, unless that’s really all they do, they are likely going to be leaning on some sort of outside legal team, in my opinion.”
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And the SEC’s marketing rule is not the only industry regulation planners many times feel ill-equipped to handle on their own.
For some of the highlights from RIA in a Box’s list, scroll down.