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Compliance ROI: Is Compliance a Cost or an Investment?
About Us                      Chris Winn                           Brian Lauzon, CFA                      Founder &       ...
Solutions across the Investment Advisor Lifecycle      Start Up or Transitioning                                         E...
Is compliance a cost and a burden… “I just want to outsource regulatory matters so I don’t                                ...
…or an opportunity to invest in and elevate your business?      •   “Compliance for compliance sake” isn’t the answer     ...
RIA Barriers to Growth…help here!      How can this…                      Source: Schwab 2011 RIA Benchmarking Survey 6   ...
Opportunities to enhance your business through compliance program                                                  1. Alig...
1. Align business and compliance functions                                                        Ensure that your day-to-...
2. Manage your firm’s risk profile through strategic planning                                         Planning mitigates o...
3. Transform a mock exam into a roadmap to success           Two Ways to View a Mock Regulatory Exam               A check...
3. Transform a mock exam into a roadmap to success  Mock (and actual) exams begin with a request list that includes items ...
3. Transform a mock exam into a roadmap to success  On their surface, these items may appear simply as “must-haves” for re...
4. Unlock hidden value in your daily activities  Regulatory oversight isn’t going anywhere. Why not seek ways to harness m...
4. Unlock hidden value in your daily activities       Monitoring and Control Procedures             • Procedures for ident...
5. Avoid the “guru effect”       Are you (or one of your colleagues) a “guru”?       Do you have any “go- to” people for t...
Focusing on something often changes your initial perception  16                          © Copyright 2012 AdvisorAssist, LLC
Reframe your perception of compliance to see it as an investment ratherthan a cost.        Opportunities to Achieve Return...
We would welcome the chance to answer any additional questions now or at somepoint in the future.Brian R. Lauzon, CFA     ...
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AdvisorAssist Compliance ROI

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Managing an advisory firm's compliance program can be costly. Can this expense also be viewed as an investment? Learn how your compliance efforts can help you manage your firm more effectively.

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AdvisorAssist Compliance ROI

  1. 1. Compliance ROI: Is Compliance a Cost or an Investment?
  2. 2. About Us Chris Winn Brian Lauzon, CFA Founder & Managing Principal Managing Principal AdvisorAssist’s Mission To foster and support entrepreneurship within the RIA industry and to help our clients increase their firm’s enterprise value. 2 © Copyright 2012 AdvisorAssist, LLC
  3. 3. Solutions across the Investment Advisor Lifecycle Start Up or Transitioning Established Advisors Advisors • SEC & State Registration Compliance & Regulatory • Transition Planning • Ongoing Compliance Support • Operations & Technology • SEC to State Transition Planning • Mock SEC & State Exam • Marketing Planning & • Compliance Program Design Advertising Review • Outsourced CCO COO & Practice Management • Strategic Planning • Sales & Marketing Planning • Social Media Strategy • Outsourced COO 3 Copyright 2011 AdvisorAssist, LLC
  4. 4. Is compliance a cost and a burden… “I just want to outsource regulatory matters so I don’t If a commercial airline pilot said these things about have to deal with them.” FAA regulations, would you board their plane? “This is really just a necessary evil.” “Regulations are a distraction from what I really want to be doing every day.” 4 © Copyright 2012 AdvisorAssist, LLC
  5. 5. …or an opportunity to invest in and elevate your business? • “Compliance for compliance sake” isn’t the answer • Devoting “one day a quarter” to tend to compliance program often means that day will never come. • Seek opportunities to weave compliance into daily activities • Most compliance requirements are rooted in sound business practices • Regulatory requirements provide opportunities to elevate the advisor’s game and unlock enterprise value in your business 5 © Copyright 2012 AdvisorAssist, LLC
  6. 6. RIA Barriers to Growth…help here! How can this… Source: Schwab 2011 RIA Benchmarking Survey 6 © Copyright 2012 AdvisorAssist, LLC
  7. 7. Opportunities to enhance your business through compliance program 1. Align business and compliance functions 2. Manage your firm’s risk 5. Avoid the profile through “guru effect” strategic planning 4. Unlock 3. Transform a hidden value in mock exam into your daily a roadmap to activities success 7 © Copyright 2012 AdvisorAssist, LLC
  8. 8. 1. Align business and compliance functions Ensure that your day-to-day technology tools support or fulfill required compliance activities • CRM • Portfolio Management System • Trading Conduct periodic due diligence on vendors and partners • Typically results in a deeper understanding of vendor/partner capabilities • Opportunity to capture more of what is available to you through vendors/partners 8 © Copyright 2012 AdvisorAssist, LLC
  9. 9. 2. Manage your firm’s risk profile through strategic planning Planning mitigates operational, financial and regulatory risks Business Continuity Planning (BCP) • Resumption of systems and key person risk • Develop a plan that helps you serve your clients easily and without disruption Succession Planning • Businesses have value that can be transferred • Clients usually don’t ask…but it’s on their mind Technology Planning • Privacy and security • Remote access • Client access Financial Planning • Historical (five years) balance sheets and income statements can become baseline for YOUR financial planning • Sales forecasting, budgeting, goal setting, pricing analysis 9 © Copyright 2012 AdvisorAssist, LLC
  10. 10. 3. Transform a mock exam into a roadmap to success Two Ways to View a Mock Regulatory Exam A checklist… …or a roadmap 10 © Copyright 2012 AdvisorAssist, LLC
  11. 11. 3. Transform a mock exam into a roadmap to success Mock (and actual) exams begin with a request list that includes items like: • Up- to-date list of “control persons”, “access persons” and IARs. • Copies of most recent risk assessments • Trading process documentation • Internal review schedules • Copies of advisory agreements • Copies of fee schedules (including performance-based fees) • List of all proprietary accounts • Email and social media archives • Copies of all advertising (marketing) materials 11 © Copyright 2012 AdvisorAssist, LLC
  12. 12. 3. Transform a mock exam into a roadmap to success On their surface, these items may appear simply as “must-haves” for regulatory exams, but they are also starting points for building a successful business. • Confidence in your email/social media archiving and policies opens up new ways to promote your brand and engage with prospects and clients • Documented processes improve your firm’s efficiency, scalability and transferability • Centralized location for fee schedules creates opportunity to review or re-think your pricing strategy and service models 12 © Copyright 2012 AdvisorAssist, LLC
  13. 13. 4. Unlock hidden value in your daily activities Regulatory oversight isn’t going anywhere. Why not seek ways to harness more value from it to help enhance your business? Compliance activities can institutionalize your people, processes and technology and become a “business” rather than a “practice”. 13 © Copyright 2012 AdvisorAssist, LLC
  14. 14. 4. Unlock hidden value in your daily activities Monitoring and Control Procedures • Procedures for identifying and escalating compliance issues can also be applied to operations, technology or HR issues Investment Policy Statements (IPS) • Viewed by some RIAs as too risky • Should really be viewed as protective of RIA • Trend is shifting towards formalizing investment process and codifying client goals and guidelines in IPS Client Profiling • Capturing clients’ personal balance sheet allows you to see their complete financial picture • Identify opportunities to expand your relationships Financial Books and Records Requirements • Five years of financial statements can be repurposed as budgeting and financial planning tools Advertising Books and Records Requirements • Maintain consistency among your team or offices by centralizing storage of collateral and content (e.g. Firm profile, bios, key points of differentiation, values statement, social media profiles) • Create cohesiveness by fostering unified messaging and branding 14 © Copyright 2012 AdvisorAssist, LLC
  15. 15. 5. Avoid the “guru effect” Are you (or one of your colleagues) a “guru”? Do you have any “go- to” people for things that do not add value to your firm or their career? If you are the “guru”: Acknowledge, delegate, empower and reward If a member of your • Foster a culture where people don’t feel the need team is a “guru”: to hold on to responsibilities or “protect their turf” • Seek outsourcing opportunities • Define roles and career paths (separation of duties) • Performance reviews • Cross-training 15 © Copyright 2012 AdvisorAssist, LLC
  16. 16. Focusing on something often changes your initial perception 16 © Copyright 2012 AdvisorAssist, LLC
  17. 17. Reframe your perception of compliance to see it as an investment ratherthan a cost. Opportunities to Achieve Returns from Your Investment in Compliance • Improve coordination and cohesiveness among team members and offices Enhance Enterprise Value • Institutionalize procedures that will enhance your firm’s scalability, transferability and enterprise value • Become less “people-dependent” and more “process- Reduce Risk dependent” • Build culture of “risk management” • Demonstrate a commitment to best practices that are in Deepen Client their best interests Relationships • Identify opportunities to become their #1 “trusted advisor” • Incorporate your business practices into your firm’s Differentiate messaging and branding • Become a magnet for talent 17 © Copyright 2012 AdvisorAssist, LLC
  18. 18. We would welcome the chance to answer any additional questions now or at somepoint in the future.Brian R. Lauzon, CFA Chris WinnPhone: 267-385-8861 Phone: 617.532.0925 blauzon@advisorassist.com cwinn@advisorassist.com Join AdvisorAssist LinkedIn Group Follow us @AdvisorAssist Subscribe to the AdvisorAssist Blog at blog.AdvisorAssist.com18 © Copyright 2012 AdvisorAssist, LLC

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