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As the calendar year draws to a close, RIAs find themselves immersed in a flurry of activities related to regulatory compliance, client reporting, and strategic planning. The end of the year is a critical period for RIAs, requiring a meticulous approach to meet various requirements. Several key tasks and responsibilities need to be addressed as you approach the end of the year and we are here to help you accomplish them all!
Regulatory Compliance Review:
At the forefront of an RIA's year-end responsibilities is a comprehensive review of regulatory compliance. This involves ensuring that the firm is in adherence to all applicable securities laws and regulations.
By this time, your policies and manuals have been updated for the year and shortly, you will receive a copy of your annual branch office review that is conducted behind the scenes by tru Compliance.
Annual Registration Fees:
In November of each year, tru Compliance does a review of all states in which your Firm is required to be Notice Filed in, as well as review registration for all individuals. This time period is your only opportunity to drop states if they are no longer needed, and to reinstate and pay for those states that will be continued.
For 2023, fees MUST be paid by 12/11/23 or you will not be registered for 2024. The CCO for your firm will be reaching out to provide you an invoice and to obtain your ACH information to pay for fees if they have not already done so.
Annual Compliance Meeting and IAR Continuing Education:
The end of the year is an opportune time to evaluate the professional development needs of employees. Your CCO will schedule an Annual Compliance Meeting to ensure that staff members are well-versed in the latest industry trends, regulatory requirements, and technological advancements. This commitment to continuous improvement not only enhances employee skills but also contributes to the overall success of the firm.
Starting in 2022, several states have also instituted Continuing Education requirements for IARs. As of today, not all states have implemented the requirement.
Any IAR required to complete CE by year-end has already been notified by email of their requirement, but if you have and questions, please reach out to the tru Compliance team.
Cybersecurity and Data Protection:
As cyber threats continue to evolve, RIAs must remain vigilant in safeguarding client data. Conducting a year-end review of cybersecurity protocols and implementing any necessary updates or enhancements is crucial. This includes educating staff on cybersecurity best practices, ensuring secure data storage, and staying abreast of emerging threats.
Strategic Planning for the Coming Year:
Looking ahead is a fundamental aspect of an RIA's year-end responsibilities. Strategic planning involves assessing the firm's performance, identifying areas for improvement, and setting goals for the upcoming year. This process should encompass business development, client acquisition, and any necessary adjustments to the investment strategy based on market conditions. Although Compliance does not assist, we feel this is a very important reminder.
Next Up - Form ADV Amendments:
RIAs are required to file an annual updating amendment to their Form ADV with the Securities and Exchange Commission (SEC) within 90 days of the end of their fiscal year (March 31st). This amendment should reflect any material changes to the firm's business operations, disciplinary history, or other relevant information and must be sent to every client, along with the Firm’s Privacy Policy, within 30 days of filing. Ensuring accurate and up-to-date information on Form ADV is crucial for maintaining transparency with clients and regulatory authorities.
Conclusion:
As RIAs navigate the complexities of the financial industry, the end of the year serves as a crucial checkpoint for ensuring regulatory compliance, client satisfaction, and overall business success. By diligently addressing the aforementioned requirements, RIAs can lay the groundwork for a prosperous and compliant new year, fostering trust and confidence among clients and regulatory authorities alike.