Working up your annual review and update for your RIA business requires you to take a close look at your firm’s processes and disclosures as well as other aspects of the business. Clearly, this is a good time to communicate with your staff and employees about these items. What you – or your employees – do not know about your business operations CAN hurt you.
One way to look at the discussion here is as a training opportunity. You and your compliance personnel will already be involved in preparation of the annual update and so the concepts, changes and potential issues will be front of mind. Leverage that energy and information to engage your staff in the process, ensuring that you know what they are and have been doing AND that they understand what they should be doing, and why.
This is not to say that staff members are not doing their jobs properly or that you have not been paying enough attention to what they are doing. It does say that with this training/review both you and your staff can have confidence that you are doing things right and that you will not be found lacking in an audit. It is also an opportunity to address changes in the regulatory environment and bring everyone up to speed at the same time you are updating your disclosures and processes.
There is plenty to think about and train on, ranging from your trading processes to the use of social media, from the staff’s personal accounts and investments to the investment selections you made for your clients, and much more. Even if you feel comfortable with your compliance situation, it will be good to keep it fresh and important for you and your staff.
Another benefit of this approach is the engagement of the staff, since being able to ask questions, make suggestions and state opinions is important to a successful firm. Finally, this tying of training on processes to the preparation of the annual update reduces the burden of preparation and also reduces the risks for the firm going forward.