The records-request drill: a one-hour practice run for small RIAs
A records-request drill is a short practice run where a small RIA pretends a regulator has asked for a set of records and times how long it takes to produce them. Pick one client and one past period, list the records you'd expect to be asked for, find each one, and note what was slow, missing or out of date. Fix the gaps, and repeat the drill once or twice a year with a different client.
Most firms find out how organized their records are on the day a request arrives. That's the worst day to find out. A drill moves that discovery to a quiet afternoon, when a missing document is a to-do item rather than a problem.
How do you run one?
- Pick a client and a period. A household with a few accounts and some activity, and a quarter from last year.
- Write the request. List what a regulator might ask for (see the table below). Don't look anything up yet.
- Start a timer. Find each record and note the minutes it took and where it was.
- Mark each one: found and current, found but out of date, or missing.
- Stop at one hour. Whatever you haven't found is part of the result.
- Fix the gaps, starting with anything missing, and give each fix an owner and a date.
What should the practice request include?
| Record | What you're checking |
|---|---|
| Advisory agreement | Signed copy on file, matching the fee you charge |
| IPS in force during the period | The version that applied then, not just the latest |
| Strategy or model for each account | What each account was meant to follow, with dates |
| Trades in the period | A blotter you can match to custodian confirms |
| Fee calculation for the quarter | The calculation, exclusions and the amount deducted |
| Brochure delivery | Which version went to the client, and when |
| Communications | Emails and meeting notes for the period |
| Suitability or review notes | The last review before or during the period |
| Complaints or incidents | Any entries for this client, or a dated note that there were none |
A worked example
Take a hypothetical two-person RIA. The operations lead picks a household and the second quarter of last year. In 60 minutes she finds the agreement, the trades and the fee calculation quickly. The IPS takes 20 minutes, because only the current version was easy to find and the earlier one was in an email. The brochure delivery record is missing. The fixes: file every IPS version against the account with its dates, and start a delivery log. Next drill, she picks a different household.
What does a good result look like?
- Every record found inside the hour.
- Each record is the version that applied during the period, not just the latest.
- Nobody had to ask the one person who "knows where things are".
Common gaps a drill turns up
- Only the latest IPS is easy to find.
- Fee calculations overwritten each quarter.
- Brochure delivery recorded in a sent folder, if anywhere.
- Strategy changes that were never dated.
When is this overkill?
If you've just been through a real exam and produced everything easily, you've had your drill for the year. Otherwise, one hour is cheap insurance.
How Advorra fits
Advorra keeps IPS versions, the dated strategy of record, the trade blotter, billing runs and compliance registers on each client's record, and has a 48-hour records-production pack that pulls them together. A drill in Advorra is mostly a check that the records are complete. See the product page, or read about books and records and what audit-ready means.
One thing to do this week: book one hour in your calendar for a drill, and pick the household now.
A practice routine, not legal or compliance advice. Your regulator and compliance consultant decide which records you must keep and how quickly you must produce them.
Questions advisors ask
How often should we run a drill?
Once or twice a year is enough for most small firms. Run one after any big change, such as new software or a custodian move.
Who should run it?
Someone other than the person who usually keeps the records, if you can. They'll find the gaps a regular user steps around.
How fast do we need to produce records?
It depends on your regulator and the request. Some state regulators can ask for records within a short window; Texas, for example, can expect records within 48 hours unless it allows more time. Check your own regulator's rules.
Should we use a real client?
Yes, but keep the drill inside the firm. Nothing leaves the office, and the client isn't contacted.
Is this compliance advice?
No. It is a practice routine. Your compliance consultant can tell you which records your firm must keep.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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