How to Conduct an Annual RIA Compliance Meeting

The Securities and Exchange Commission (SEC) imposes rigorous compliance rules on registered investment advisors (RIAs). In addition to developing written compliance policies, you’re also expected to hold, and document in writing, an annual compliance meeting. If you’re a newly established RIA, a little preparation can make the process of conducting this meeting a smooth one.

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RIA Annual Compliance Meeting Checklist

The annual compliance meeting allows your chief compliance officer (CCO) to review your firm’s policies, address potential deficiencies and recommend updates, if needed. There’s no specific deadline by which you need to hold this meeting, though many RIAs opt to do so after filing annual Form ADV updates.

Here’s how to navigate planning and executing an annual compliance meeting for your firm.

1. Schedule and Invite

Compliance meetings can be held in person or virtually. Your chief compliance officer should decide on the meeting’s format, date and time. They’ll also need to ensure the right people receive invitations. Generally speaking, all supervised persons and their staff members should be invited to sit in on the meeting.

What if you’re a one-person RIA, acting as owner, head advisor and CCO? You still have to hold an annual compliance meeting. The advantage is that it’s easier to coordinate for one person versus a team. Developing a compliance meeting agenda can help you (and your attendees, if you have them) stay focused and on task.

2. Review Regulatory Updates

Federal and state regulations are always evolving, so it makes sense to spend the opening portion of your compliance meeting discussing the latest regulations and news. The implementation of new rules or updates to existing ones may require changes to your firm’s policies to ensure compliance.

Here are a few sources you may use to check for updates:

SEC’s Rulemaking Activity Index
SEC Newsroom (for press releases, meeting news
FINRA Rulebook
FINRA News Releases

You may also use this portion of the meeting to look forward to RIA compliance trends that are still developing or discuss SEC exam priorities for the upcoming year. Both can offer insight into which compliance areas are likely to receive more attention and scrutiny from regulators, and where you may need to plan for future adjustments.

3. Review Policies and Firm Documentation

Running an RIA involves a lot of paperwork, and whether you maintain physical or digital files, there are certain documents you’ll need to review during your annual compliance meeting. In addition to your firm’s policies, you’ll also need to examine operational procedures.

The list of items to review includes:

Form ADV (if you have yet to submit your annual update)
Form CRS, if applicable
Code of ethics
Cyber security policies, including data encryption and record storage
Anti-money laundering (AML) and know your client (KYC) policies and procedures
Hiring practices
Business continuity and succession plans
Marketing practices and procedures
Recordkeeping policies
Privacy policies
Client documents, including new client questionnaires and account contracts
Client onboarding and offboarding processes

The purpose of reviewing these documents is to ensure they’re still aligned with current compliance standards. If changes are needed, they should be detailed in your meeting notes. Once updates have been made, all team members should receive updated copies of the affected policies and procedures.

4. Assess Your Firm’s Compliance Risk

An advisor prepares for their firm's annual RIA compliance meeting.

You complete risk assessments for your clients, but you also need to do them for your business. During your meeting, take time to evaluate which compliance areas present the biggest risks for your business.

Marketing, for example, has the potential to be a trouble spot if you’re not up to date on the SEC’s latest marketing regulations. The same goes for cyber security. Recent rule changes require RIAs to develop written cyber security practices and report cyber security breaches promptly.

This part of your compliance meeting may be the most eye-opening, so don’t skim over it. Risk awareness can help you develop effective strategies for mitigating potential compliance issues or reacting to them proactively when they arise. You can use a ranking system to prioritize potential threats based on their severity.

5. Review Client Billing

The SEC takes accurate billing seriously, so part of your annual compliance meeting should include a review of your fee schedule and billing practices. Here, you’re looking for discrepancies or inaccuracies in billing as well as transparency and clarity in your firm’s writing fee policies.

For example, if your firm uses an AUM fee model, you’ll need to check client holdings against the fees they pay to ensure you’re billing them correctly. You may also use this time to discuss any proposed updates to your fee schedule and how those will be rolled out compliantly.

6. Mention Firm Updates

If your firm has undergone any notable changes or you simply want to discuss your progress year over year, you could include that in your compliance meeting agenda. Topics you may cover here include:

New service offerings you’ve developed
Increase/decrease in client AUM
Additions to your team
Organizational or ownership changes
Expansions into new service areas
New collaborations or partnerships related to business development

Anything you cover should be discussed in the context of what it may mean for your firm’s compliance.

7. Draft a Final Summary

The SEC requires RIAs to document annual compliance meetings, so assuming that you’ve been taking good notes throughout, you can use them to prepare a final summary or wrap-up. This document should mention:

Compliance topics discussed
Who attended the meeting
Recommended policy and procedure updates
A timeline for implementing the recommended changes
Who will be responsible for overseeing updates

You may need to schedule additional meetings with your CCO or team members who have been tasked with making updates. Document those meetings as well to track your progress in ensuring compliance.

Bottom Line

An owner and CCO scheduling an annual RIA compliance meeting for their firm.

Annual compliance meetings are non-negotiable for RIAs, but knowing how to conduct one can make the process less stressful. Proper planning can help you cover all the most important compliance bases and gain maximum value from your meeting.

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If you need help planning or conducting an annual compliance meeting, you may consider hiring a compliance consultant or leaning into technology to get the job done. Compliance software, for example, can help you identify risks in your firm’s compliance plan and ensure good recordkeeping. A compliance consultant, meanwhile, can guide you through the meeting process, step by step.