Tech Tools to Streamline Compliance
New rules and regulations, combined with increased scrutiny from regulators, have created a challenging environment for many firms. Thankfully, there are some technology solutions that can help advisors stay in compliance. These tools are by no means a substitute for a compliance attorney. Used properly, though, technology can complement the efforts of your compliance team.
I’ve examined two new technologies: RIAglass, a new product from consulting firm MarketCounsel and My-
RIACompliance from RIA in a Box.
RIAglass is one of the more promising applications I’ve come across lately. It is still in the beta testing phase, available only to the firm’s clients and is scheduled to launch in mid-February.
Before deciding to build the application, MarketCounsel surveyed many applications that had the word “compliance” associated with them, even if they were focused on a different business, says the company’s founder, Brian Hamburger. Hamburger said all the products they studied focused on calendars and task management applications. MarketCounsel thought firms needed much more.
The firm wanted to build a community hub where firms from many disciplines could support independent, entrepreneurial investment advisors. A team of advisors moving from the B-D world to the independent RIA space would have multi-disciplinary needs. They would aim to acquire office space. They might need to hire staff. They would want to establish a custodial relationship and acquire technology. All of this would require a team of specialists.
Hamburger says the greatest challenge for both new and existing firms is that they are not good project managers. RIAglass is designed to address this failing.
The RIAglass Glassboard, or home page, shows a dashboard with several widgets. “My Objectives” can be used for maintaining regulatory compliance, acquiring office space or establishing a custodial relationship.
You can drill down into complex projects and set timelines that track your progress. “Featured Articles” allows users to post articles related to the objective, or instructions and PowerPoint presentations.
You can add tasks associated with an objective and assign them to a staff member through the task screen, which looks similar to the Glassboard. The task screen allows you to attach documents and allow collaborators to send messages related to the task, similar to LinkedIn messaging. (RIAglass archives all messages, even if the user deletes them, for compliance purposes.) The beauty is that everything associated with the task stays in one place, available to everyone authorized to see it.
The system allows a team to collaborate and message each other in a secure environment. All the while, the firm principals can track projects and related tasks.
RIAglass has a well-designed notifications system. Users will see notifications in the system’s upper right area. Click on the flag and you’ll receive a detailed description of the issue. If you choose to receive email notifications, you’ll get a shorter, general description of the issue.
Another clever element is the security feature. RIAglass uses LinkedIn to authenticate users, as nearly every RIA and industry provider has a LinkedIn profile.
MarketCounsel’s ultimate goal is to create an ecosystem of specialized service providers that RIAs can access securely in a collaborative environment. If an RIA wants to engage a business development firm, users could ask for RFP’s from several providers, select one, collaborate with the provider through RIAglass and even handle payment through the site. The RIA’s attorney could review contracts and other relevant documents on the site. And the provider could upload project templates and tasks, and customize them for the client.
RIAglass is not fully built out so there are a few features that need adding. One is calendar integration with leading CRM providers that serve independent RIA’s. The other is the service provider marketplace. Pricing for RIAglass was not available at this time.
MyRIACompliance is an online software management tool available to all clients of RIA in a Box. The firm aims to combine its staff’s compliance expertise with easy online technology to make compliance responsibilities more manageable and transparent.
The tool is data driven. It captures the relevant information from an RIA firm’s form ADV and uses that data to customize the experience. If the software logs a firm’s AUM and where the firm has offices and clients, the tool can provide necessary registrations. The software can be configured to make sure the proper policies, procedures and checklists are created and followed.
The data contained in the software allows MyRIACompliance to provide ongoing guidance tailored to a specific firm. If the software knows the number of clients in a state falls under the de minimis rules there, it will not alert the managers to file. But if a firm is about to sign on a client in a state with no de minimis exemption, such as Louisiana, the software will alert the firm that it must first register in the state before accepting the first client.
The software is user friendly. The home page’s dashboard is populated with compliance widgets. A workflow tracker could be expended or collapsed. I was able to view all work in progress and see all tasks for each employee and whether or not they were keeping on schedule.
The heart of the system is the compliance calendar, also accessible from the dashboard. The software schedules all of an employee’s tasks on the calendar based upon roles and responsibilities, so each employee knows what is expected of them. The tasks on the calendar are color-coded. and are often accompanied with sample documents and other supporting materials.
Other widgets cover attestation activities, compliance history, teams and settings. The “Compliance History” widget offers a full history of compliance activities sorted by role. “Your Team” allows you to message other members of the firm and archive activities related to compliance. “Settings” allows you to manage how the application works and upload attestation documents.
With MyRIACompliance’s data-driven approach, the Form ADV is only the beginning. The firm has been building out an integration with Orion that will allow the firm to use an advisory firm’s Orion data to provide enhanced services. If an advisor uses Orion’s paperless account opening process, MyRIACompliance will be able to automatically scan the application to determine if the advisor needs to register in a new state.
Access to portfolio data will allow users to provide investment and trading-related alerts to clients. The richer the data set they have access to, the more they can automate the process.
Pricing is reasonable. The basic service, which includes the software and limited compliance assistance, starts at $195 per month plus $12 monthly per additional employee; and $345 for SEC-registered advisors.
The Pro package, which seems like a more realistic choice for all but the smallest firms, is $395 a month for state-registered advisors and $595 for SEC-registered advisors. The top tier package is $1,945 monthly for state-registered and $2,245 monthly for SEC-registered.
Joel Bruckenstein, a Financial Planning columnist, is co-creator of the Technology Tools for Today conference series and technology guides for advisors. For more information, visit JoelBruckenstein.com. Follow him on Twitter at @FinTechie.