Working with a compliance consultant: what a small RIA should have ready, and what to hand over
A small RIA gets the most from a compliance consultant when its records are current and easy to share before the consultant asks. Keep ready the written procedures, the compliance registers (complaints and incidents, discretionary accounts, personal securities, brochure delivery), recent billing runs, IPS versions and the dated history of each account's strategy. Send a short pack before each review, agree who owns which task, and log what the consultant recommends and what you did about it.
Most small firms pay their compliance consultant by the hour or on a retainer. The expensive hours aren't the ones spent on advice. They're the ones spent waiting for files, asking which version of a document is current, and rebuilding a log nobody kept. Getting the records ready before the consultant asks is the cheapest way to get more from them.
What should be ready at all times?
| Record | What the consultant checks |
|---|---|
| Written procedures | That they match how the firm actually works |
| Complaints and incidents log | Entries, responses, and that it's reviewed |
| Discretionary account list | That it matches the accounts you trade |
| Personal securities reports | That reports are in on time and reviewed |
| Brochure delivery log | Delivery to new clients and after material changes |
| Billing runs | That fees match agreements and disclosures |
| IPS versions and strategy history | That accounts follow what clients agreed |
What goes in the pre-review pack?
- A one-page list of what changed in the firm this year: people, services, fees, custodians, systems.
- The year's registers and logs, exported as they stand.
- A sample of billing runs, chosen by the consultant if they prefer.
- Any complaints, incidents or errors, with what was done.
- Last year's recommendations and what you did about each.
How should the work be split?
- The firm: keeps records current, gathers documents, implements changes.
- The consultant: reviews, tests, advises, and helps with filings.
- Both: agree deadlines and log each recommendation with an owner and a date.
A worked example
Take a hypothetical two-person RIA ahead of its annual review. A month before, the operations lead exports the registers, picks out the year's billing runs and IPS updates, and writes a one-page change list: a new associate advisor, a move to billing in arrears, and a new practice software. She shares the pack through a secure link. The consultant spends the review on the billing change and the new advisor's supplement rather than chasing files, and leaves four recommendations, each logged with an owner and a date.
What are the common gaps?
- Registers rebuilt the week before the review.
- Last year's recommendations never followed up.
- Documents sent as dozens of email attachments.
- The firm expecting the consultant to keep its records.
When is this overkill?
If you only speak to your consultant once a year, the pre-review pack is still worth it. It's the same work, done once, in order.
How Advorra fits
Advorra keeps the procedures vault, the compliance registers, billing runs, IPS versions and the strategy history in one place, with a 48-hour records-production pack, so the pre-review pack is mostly an export. See the product page, or read about the annual compliance review and written procedures.
One thing to do this week: find last year's consultant recommendations and check what happened to each one.
An operations guide, not legal or compliance advice. Your consultant agreement sets their role.
Questions advisors ask
What does a compliance consultant do for a small RIA?
Typically: helps with registration and filings, reviews policies and procedures, runs or supports the annual compliance review, and advises on specific questions. The scope depends on your agreement with them.
What should we send before the annual review?
Your written procedures, the year's registers and logs, a sample of billing runs, recent IPS updates, any complaints or incidents, and a list of what changed in the firm during the year.
Can the consultant keep our records for us?
Usually the firm keeps its own records. The consultant reviews them. Check your agreement.
How should we share documents with them?
Through a secure method, not email attachments, and only what they need.
Is this compliance advice?
No. It is an operations guide to working with your consultant.
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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