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SEC cites ‘vast majority’ of multi-branch RIAs for compliance defects

November 18, 2020

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) published a risk alert on November 9, 2020, which discussed supervisory and compliance issues related to Registered Investment Advisors (“RIAs”) with multiple branch offices.  The “vast majority” of large RIAs that operate out of numerous offices struggle to supervise remote personnel and ensure compliance across their branches adequately.

Foreside’s Kelli Haugh, Managing Director, spoke with Financial Planning’s Kenneth Corbin and shared, “One should surmise that any practice specifically identified in a risk alert will be an area of focus — and reduced patience — by a regulator.”

The SEC is warning, noting the prevalence of inaccurate, loosely enforced and inconsistently applied policies and procedures. Learn more about the focus on firm billing issues and the other elevated risks advisors need to be aware of now!

Haugh notes that branch offices have “an elevated risk for compliance deficiencies” because their distance from the firm’s headquarters invites the development of “practices that are inconsistent with the main office’s processes.”

Read Kelli’s full comments in Financial Planning here.