Don’t Let Compliance Obstruct Your Growth

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

No advisor has ever gotten into the profession because they were passionate about compliance. Compliance is so time consuming and costly that many advisors would rather avoid it.

But it's a non-negotiable burden.

Most large firms have departments that deal with compliance. But what happens when an advisor wants to break away from her large firm and start her own RIA? Compliance takes time, effort, and funds that many advisors don't have, which can lead them to stay with a firm even if they disapprove of the client experience or have limited opportunities for professional growth. Essentially, leaving a large firm is too daunting.

However, compliance shouldn't be the reason you stay at a firm that doesn't align with your values or your vision. Luckily, there are alternatives.

Option 1 – Keeping it in-house

The first option is to keep compliance in-house. But as an RIA, implementing an in-house compliance program requires taking on a great deal of responsibility, including delegating control to a chief compliance officer (COO), ensuring the adequacy of annual audits and regulatory technology, and confirming that all procedures and policies cover the full scope of any and all relevant legislation. Changes to compliance regulations happen regularly, so your firm will absorb this position over the long haul. Additionally, hiring a full time CCO is costly, and there are more economical options.