By Jim Hooks, Managing Director, CCO
As a core component of every compliance program and as required by Rule 206(4)-7, wealth management firms are required to adopt and implement written policies and procedures that are tailored to the business of the firm. To meet a firm’s regulatory requirements and to be in alignment with the written policies and procedures, firms are expected to have sufficient compliance resources to carry out the responsibilities.
Compliance officers are increasingly becoming more concerned with personal liability, so much so that after hearing those concerns, the National Association of Compliance Professionals (NSCP) has developed the NSCP Firm and CCO Liability Framework as a helpful resource. This framework is a recommended read for anyone involved in the design and oversight of a compliance program.
As firms assess their overall priorities for the coming year, attention to ensuring the adequacy of the compliance program should be high on the priority list. To determine specific areas that may require more focus within the firm, you can use the 2022 Report on FINRA’s Examination and Risk Monitoring Program as another helpful resource. Of no surprise, Reg BI and Form CRS are at the top of the list. In light of recent regulatory actions taken against some firms, this area certainly requires close attention. In addition, cybersecurity remains a high risk and continues to gain the attention of regulators. And quickly speaking of cybersecurity, have you reviewed the proposed new rule on cybersecurity that will impact investment advisers and investment companies?
Firms have an obligation to ensure they are following their written policies and procedures, implementing newly adopted rules and staying abreast of proposed regulations. There is a lot of activity occurring within the regulatory environment and as a result, “inflation” is also occurring within firms’ compliance departments. At Private Advisor Group, we continue to add resources in the area of compliance.
Advisors and compliance teams need to stay closely connected and agile to continually navigate this everchanging regulatory environment. At Private Advisor Group, we offer quarterly compliance meetings and take a consultative approach with our advisors to help them meet compliance obligations. If you haven’t heard from your compliance team, it might be time to connect.
