When the Regulators Come Knocking

Years earlier, when I was the principal at another firm, I was responsible for this process. We were audited and the regulators came in, reviewed the necessary material, and left. Then, about two weeks later, I received a letter with the items that needed to be addressed. They call this a deficiency letter. We were given 30 days to make the necessary corrections. Now I will go through this process as a business owner. In the notification we received, there was a list of the items they are requesting to see. Items such as parts I and II of our most recent ADV, our policies and procedures related to operations, our balance sheet, and our privacy policy, just to name a few. As I look through the list, some of the items are readily available and some will require preparation.

The bottom line is this. I view this as an opportunity to learn more about what I need to be doing. It’s been my experience that the regulators are not out to get you. I think of them as experts at what they do, and for me, it’s like a free consultation. I get to learn about the things that are important from a legal and regulatory standpoint. Since my business is relatively new there shouldn’t be a tremendous amount of information to address.

I’ll let you know how it comes out.