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3 Key Components of a Robust IT Compliance Program for RIA Firms

IT Compliance is critical for every RIA firm, and it can be challenging even for the most tech-savvy security and compliance specialists. Adhering to numerous technology-related compliance regulations is an absolute necessity for your RIA firm. Compliance violations can not only cause a huge reduction in client confidence, but also the fines for non-compliance can be significant.

Given the fact that RIA firms can be governed by not only federal entities, but also state and local entities, it is important that you and your IT administrator or outsourced IT partner understand the technology compliance requirements and the ever changing regulatory environment.

Essentially, IT Compliance for RIA firms stems from following:

  • Securities Exchange Act of 1934 – rule 17a-3 – Records to be Made by certain Exchange Members, Brokers, and Dealers
  • Securities Exchange Act of 1934 – rule 17a-4 – Records to be Preserved by certain Exchange Members, Brokers and Dealers
  • Federal, state and local laws regarding data privacy and security

To the extent possible, an RIA firm’s IT Compliance processes should be automated and feature a proactive, risk-based approach that protects both the firm’s information and the information of its clients. It should access and address potential threats quickly, while keeping total costs for the firm in check. The overarching IT Compliance Program must also create IT Compliance policies and controls that manage the firm’s overall risk and compliance. These policies along with the associated controls must then be implemented and enforced and allow for staff to respond to management questions and IT auditors quickly and efficiently.

As you design or reevaluate your IT Compliance Program keep these things in mind.

3 Key Components of a Robust IT Compliance Program for RIA Firms


1. Protect your Clients’ Data. 
A well-designed IT Compliance program will focus heavily on Data Security that protects your clients’ personal and financial information. This type of information is what cyber thieves would love to get their hands on. For more on this topic, see How RIAs Can Proactively Meet Cyber Security Standards.

2. Electronic Records Management. A comprehensive IT Compliance program will focus on data management and record retention ensuring that all documents, required records and correspondence are handled appropriately. It will include document storage, data backup, and disaster recovery. It will also encompass the archiving of email, instant message and even social media messages. For more, see 3 Risks RIAs Take When Backing Up Their Data.

3. Technology & Business Process Controls. IT Compliance review, data backup and recovery and business continuity/disaster recovery testing are inseparable and absolutely necessary for your firm to meet the regulatory requirements and maintain client confidence. You should conduct regular audits and revisit your risk management procedures to ensure that you are not only compliant but that you have a robust business continuity plan or disaster recovery plan that works. For more, see The Key Components of a Technology Disaster Recovery Plan for RIA Firms

Want to learn more?

Here are three options.

  1. Give us a call at 888-996-4642 and we’d be happy to answer any questions you have or set up a meeting to access your firm’s technology and network.
  2. You can learn more about IT Compliance and find more of our technology best practices for RIA firms in our new book, RED FLAGS: Recognize and eliminate the risks in your RIA firm’s Disaster Recovery, IT Compliance, and Cyber Security processes to safeguard your reputation and client trust.
  3. If you are attending the IMPACT® conference in Denver next month (November 4 – 7), stop by our Kiosk outside of the Schwab Center or call us at 888-996-4642 to make an appointment to meet ahead of time.