Compliance requirements to consider before going RIA
The RIA space continues to evolve rapidly and maintaining compliance has become increasingly challenging for independent advisors.
Ian Meiksins, president and co-founder of Key Bridge Compliance says the RIA space allows for more interpretation of rules compared to the prescriptive nature of compliance at large broker-dealers.
This flexibility can be a double-edged sword, however, requiring RIAs to develop highly tailored policies and procedures.
“That could be a tough transition for anybody. It’s a really big place that’s caused some difficulties,” he says.
He highlights the SEC’s proposition of 26 new rules in the last year and alludes to the current regime which is proposing rules and regulations at an “unprecedented rate”. “It’s changing on all of us as quickly as we’ve ever seen,” says Meiksins.
Embarking on the RIA journey involves navigating a complex landscape of compliance requirements. That’s why it’s important for RIAs to understand their priorities when first starting out.
Alisha Dowell, an independent compliance consultant, says the first thing that advisors should keep top of mind is knowing what regulator they’re going to be dealing with and who they’re required to register with. Advisors should also “be conservative” when they make their estimation for how many assets they’re taking with them.
“In general, the line is $100 million dollars,” she says. “If you’re under that, the likelihood is you’re going to be registering with individual state registrations. Over that line, it will be with the SEC. That’s the first decision you have to make, because that impacts timing and all other kinds of things.”
Advisors who find themselves under that $100 million dollar line, she believes, are better served
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