There is no specific regulatory requirement that says registered investment advisors must provide “mandatory” training to their employees. However, identical and related training questions are prominent on the current SEC regulatory examination. In addition, the preparedness, ability and experience of the firm’s CCO is now a very relevant issue during examinations, especially if the SEC is concerned that the CCO position is not filled by an individual who has the requisite knowledge, ability and authority within the firm to adequately discharge his or her duties.
It would be prudent for advisors to adopt a training process for their employees. I have devised our clients’ policies and procedures such that the firm will provide initial training and information to new employees and a mandatory annual meeting for the entire staff (participation via teleconference or video conferencing is sufficient for firms with branch offices). Of course, many firms do and will continue to hold compliance-related meetings more often than annually.