Advisory firms are spending more time on compliance, with 92% of registered investment advisors (RIAs) employing at least one full-time compliance specialist, an increase from 78% in 2010, according to a recently released compliance survey of 412 RIAs.
The Investment Adviser Association (IAA), ACA Compliance Group, and Old Mutual Asset Management recently released their sixth annual Investment Management Compliance Testing Survey, which found the top five compliance concerns for RIA firms of all sizes are advertising and marketing, data security, custody, personal trading and regulatory reporting.
The survey also found that other top compliance concerns among small, mid-sized and large RIA firms are pay to play rules, social media, whistleblowing, Form ADV Part 2, insider trading, anti-bribery and financial crime as well as foreign advisory activities.
The top two “hot compliance topics” for advisors participating in the survey were regulatory reporting (44%)—which includes compliance with Form ADV Part 2—as well as insider trading (42%) , notes Kathy Ireland, associate general counsel at IAA.
Among the 412 survey participants 7% indicated that they have more than 20 employees serving in a legal or compliance function, while 66% of chief compliance officers (CCOs) wear two or more hats and perform non-CCO functions. This is a decrease from the 2010 survey, in which 75% of CCOs performed non-CCO functions.