RIA Compliance Management Part II – There Has to Be a Better Way

RIA Compliance Management Part II – There Has to Be a Better Way


RIA Compliance Management with PAG


Published March 20, 2019

Last week in Part I of our RIA Compliance Management blog, we discussed the overwhelming responsibility advisors face in minimizing their exposure to risk when it comes to compliance issues. It’s an all-encompassing job for even a highly qualified CCO, which many independent firms lack.

RIAs are clearly proud of what they do. As fiduciaries, they have pride and honor in their ADV’s and the services they offer clients. It’s a noble business, and it clearly has had a profound positive effect on wealth management overall. It’s not surprising that RIAs are fiercely independent. But there exists a tipping point out there where the complexities of running an RIA just overwhelm advisors, forcing them to seek out alternatives for simplification. Managing compliance, in our judgment is a substantial piece of the “complexity” puzzle that quite literally takes the “fun” and energy out of the business. Many advisors in this camp turn to rolling-up into other larger RIAs to solve for the need of managing compliance and gaining overall operating leverage.

However, what if there was a better way? What if there was a way to enjoy all aspects of independence and bring joy back to the business, where advisors could focus all their efforts on what they love doing most? Instead of capitulating to a roll-up situation and combining your equity with another firm, what if there was a truly 100% outsourced compliance/CCO solution, including all implementation and process management at a very reasonable cost? We have developed such a unique solution, and it’s unlike what many advisors are accustomed.

It’s Possible to Outsource Compliance While Retaining Control

Advisors seeking to solve for a truly outsourced compliance program turn to PAG for help. We figured out a way to eliminate the need for managing a compliance program and everything that comes with it, including the need for the CCO role. Advisors who leverage PAG continue to service their clients as they always have, continue to build and market their unique brands, maintain their unique websites, public/social/media presence, etc. Client’s custodial accounts are also unaffected. What changes is that the advisor simply suspends their RIA registration/ADV to roll-up under ours. This is the only way our firm can effectively take control of the entire scope of compliance work and help them mitigate regulatory risk. Again, this has no effect on practice ownership and equity.

Since we are a purpose-built, professional compliance services firm, our unique position in the industry has us in the right place at the right time, helping advisors who are exhausted with managing compliance and/or want to de-lever their exposure to regulators. When the SEC is looking for an audit, they knock on our door, not yours. Our proprietary technology infrastructure is built for scale and efficiency and can support any number of advisors and any amount of compliance work. Our advisors remain fiercely independent, owning 100% of their clients and equity. Accordingly, they are free to leave us at any time for any reason but have no reason to since we are providing a highly valuable service and making their lives easier.

Advisors hearing of this solution for the first time have many questions, and some impulsively lump us in with the serial consolidators which we are most definitely not! Advisors who “get it” see the simplicity we bring and understand that this is a professional services partnership, nothing more.

In closing, there are simply way too many RIAs managing their own compliance regimes who are not equipped to do so. Compliance consumes ongoing energy and resources and is a never-ending distraction. Even firms who have a highly-developed compliance program and skilled staff are at risk of being audited by the SEC and exposed to adverse findings and related fines. For some, it may be tempting to cut corners on compliance as the regulators have been asleep for a long while, but they are waking up, hiring examiners and looking for easy targets. There is a better way, and we can take all that off your plate!