Trend to Watch for 2012: Outsourcing Investment Adviser Compliance

registered investment adviser compliance With all of the new regulatory changes, compliance will likely be a primary concern for registered investment advisers in 2012. For many small firms, complying will all of the new rules can be a daunting task. That’s why many firms are turning to outsourcing.

According to Schwab’s 2011 RIA Benchmarking Study, more than one-third (38%) of registered investment adviser (RIA) firms now outsource at least some of their compliance activities, up from 27% in 2010. The study also found that outsourcing compliance is of high importance to the majority of those firms (79%).

Compliance outsourcing was reported most often among small and mid-sized firms. Schwab found that more than half of RIAs with $50 million to $100 million in assets under management (AUM) utilized at least one outsourced solution.

What Are the Benefits of Outsourcing?

As reported by Advisor One, the study also confirmed that compliance outsourcing has many advantages. Below are few of the most frequently cited:

  • Outsourcing saves money. Advisors who outsource compliance indicated that they’ve realized significant cost savings of 26% on average versus managing compliance in house.
  • Compliance is time-consuming. Advisers reported that outsourcing compliance frees up time that they can reallocate to other activities that fuel their firms’ growth and profitability.
  • Outsourcing is often effective. The study revealed that 73% of advisors who outsource compliance are happy with their decision.

How We Can Help Ensure Compliance

Of course, this post provides only a brief overview of the compliance issues facing registered investment advisers. Therefore, you should consult with experienced counsel to meet the new rules.

Eckerle Law offers a highest-quality and cost-effective alternative to the traditional law firm model for a wide variety of transactional and regulatory matters serving all your business law needs. Our experienced attorneys also provide a full range of compliance services for investment advisers, offering compliance tools that are tailored to fit the ever changing regulatory landscape as well as your business needs.

If your company would like to strengthen its business practices, please contact us today so we can leverage our experience to create real-life business and legal solutions to help your business thrive.