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Practice Management > Building Your Business

Key Systems for a Healthy Independent Advisory Business, Pt. 7: Operations, Take Two

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As part of my series of blog postings on what makes a healthy independent RIA business, last week I discussed the operations side of the business, specifically, information technology. This week, we’ll branch out into compliance, budgeting and forecasting, and in general, the business analysis sections of operations. 


There are 50 different state securities commissions and one SEC. Therefore, there are at least 51 various regulatory agencies and hence, regulations. Although there is a common thread throughout, there are a number of variables. Therefore, I will speak only to a few specific issues. You are required to send out an annual privacy notice each year. You should check with your specific regulatory body, but here, an email is sufficient. In the past few years, the SEC has mandated that investment advisors use a standardized format for their Form ADV, Part II. This “brochure” must include certain information that is formatted in a pre-approved template. My regulators have sent me this template. If you’d like a copy, send me an email. I understand it will take approximately 10 hours to complete.

There are many “compliance” issues we could discuss. I recommend you speak to your regulators and ask for their assistance. After all, they are the “experts,” right?


Integration has become a vital component of any website. The ability to capture data from visitors by offering something “special” has been gaining traction. One primary purpose for a website is so potential customers can gain some knowledge of your business in advance of a personal meeting. In short, it’s a great place to “get your message out.”

Recently, I bought a video camera. Though I am still getting used to it, and must still buy some software to allow for “drop ins,” at some point, I hope to include videos on my website. 

Your website has a “front end” and a “back end.” The former is the public area and the other is reserved for those who register with your site. You should give some thought as to the content you want to include in each part. 

Business Analysis

Client segmentation, or how to parse your clientele and tailor your services accordingly, is an important step to take. Also, each year, by mid October, you should project a budget for the following year. The revenue portion will be more difficult to project than the expense side of the ledger, as you can more easily track expenses.

There’s so much more to cover here. I haven’t even touched on the role of your custodian. That will be the subject of my next—and last—posting on this topic later this week.


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