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March 22, 2018 at 11:24 AM
Orion Advisor Services on Tuesday launched Compass, a new compliance application for advisors that lives on Orion’s Connect dashboard for users. The application—free to Orion users—allows advisors to prepare for regulatory exams and make those exams quicker and more efficient.
The first of the two tools available on Compass are:
- Audit, which allows firms to run mock audits and automate information retrieval for SEC and state regulatory exams, and
- Verify, an anti-money laundering (AML) screening service that integrates with the Risk Solutions service from the legal research and data firm LexisNexis.
Kylee Beach, Orion’s general counsel
Orion’s general counsel, Kylee Beach, said in an interview on Wednesday that the impetus for Compass came from its 1,400 advisory firm users who were “looking to navigate a fairly complex regulatory environment” in which the SEC, state regulators and FINRA are “ramping up their exam schedules.”
The services are not meant to replace firm chief compliance officers (CCOs) or external compliance consultants, Beach said. Rather, the intent is to make sure RIA firms’ CCOs are both aware of their firm’s compliance risks and then to more efficiently monitor those risks.
Beach says there are many reasons for a firm to monitor risk, “not just from a regulatory perspective but to protect your firm; you can open yourself up to liability if you can’t identify any violations” you may have first.
Beach points out that as an attorney she’s spent her career focusing on regulatory matters and was herself a CCO, “so I’ve worn that hat.” Instead of replacing the compliance officer or a compliance consultant, Orion’s tools are designed to “leverage our data” in the Orion system so advisors are not only “prepared for regulatory exam requests as they come up” but then can respond to those requests “quickly instead of spending weeks of sleepless nights” to find and deliver the information requested by examiners.
(See Melanie Waddell’s report on the SEC’s 2018 exam priorities, which include anti-money laundering.)
While Beach admitted that there are existing tools for RIA compliance officers, CCOs often “have to go to multiple third parties” to use those tools and mine the firms’ data, which she pointed out “can be frustrating” and make their compliance “lives even more complicated.” Because of the “depths of information that Orion tracks, it allows us to bring that data together” more efficiently for RIAs.
One example of how advisors could use the Orion tools, according to Beach: “Many times the SEC might come in and ask for a list of canceled client accounts. That data would all be in Orion: including when the client became inactive, and countless other data points” tracking the advisor’s relationship with those clients.
