Improve Your Bottom Line With Compliance Technology

When you consider the traditional role compliance plays in your firm, the idea of it being a “revenue generator” may not make much sense. In fact, it seems that many advisory firms have viewed compliance as a drain on resources. Compliance and regulation add steps and processes that feel inefficient and unorganized, while simultaneously taking time and energy away from the things advisors want to spend their time on.

The problem is, the SEC is aware of how advisory firms feel, and they’re taking note of the lack of resources devoted to compliance initiatives. In a recent Risk Alert, the SEC noted that growing RIAs in particular are at risk of falling out of compliance with their policies and procedures.

The Compliance Rule outlines a strict standard of compliance documentation, policies and procedures. Yet, many firms are choosing to refocus their time and resources toward achieving their growth goals. Allowing compliance efforts to fall by the wayside can result in an SEC audit and, if found out of compliance, advisors may incur hefty penalties.

Does this mean your firm should forgo its goals for growth to focus on shoring up its compliance efforts? While this may have been the only option in the past, it is possible to meet financial advisor compliance requirements while utilizing today’s technology to grow your firm too.

Remove the red tape, be proactive, and scale your firm effectively by implementing RIA compliance technology into your firm’s tech stack.

The Importance of RIA Compliance Technology

While helping your firm stay compliant is the number one goal of any regulatory- or compliance-focused software, there are several other notable benefits to consider.

Time

Your team only has so many hours in the work week, and their plates are already full with client-facing tasks. Yet, it’s still necessary for growing firms to establish and enforce compliance-friendly processes and workflows.

Advisors want to be able to spend their time focusing on tasks that are meaningful and demonstrate value to their clients. Having to set time aside for trivial back-office tasks means fewer hours they could be spending on portfolio management, holistic planning, client check-ins, etc.

While this can cause some frustration and a lack of buy-in from team members, there comes a point when neglecting these processes impedes growth goals. Your firm must dedicate the time and effort to implementing solid compliance procedures now in order to successfully scale. Neglecting to do so can easily result in a subpar client experience and/or inefficient (and costly) processes.

By integrating compliance software specifically designed for registered investment advisors, like the Nitrogen growth platform, you’re giving your team members hours back in their day — without sacrificing your firm’s ability to establish and follow compliance-focused processes.

Automation

Having the right technology solutions in your firm’s tech stack allows you to automate certain compliance processes while also increasing the accuracy and speed of compliance-related tasks.

Why is this significant? Because leveraging this technology means it’s possible for your advisors to spend less time on back-office tasks and more time working one-on-one with clients.

Essentially, compliance software helps streamline compliance processes to save valuable time, while ensuring no balls are dropped or corners skipped. Automating critical processes even reduces the chance of manual error or omission.

Preparedness

Adding RegTech to your tech stack provides you with everything you need to make an easy audit trail. Should the SEC come knocking, you’re fully equipped to offer documentation and evidence through every interaction and step in the investment process.

Show you had the right conversations, note changes, provide evidence of client buy-in on investment decisions, record your advice — using compliance technology firmwide makes it simple to provide the SEC proof of all of this. Your advisors should be able to prove that they were working in a client’s best interest at every stage of the engagement.

It’s not good enough to catch compliance problems when it’s too late. Your firm needs to be proactive in identifying issues, such as risk target drift before they escalate. Nitrogen Compliance does just that by automatically recalibrating a client’s Risk Number® and alerting the advisor to a potential drift as soon as it happens. Advisors can quickly resolve the issue or communicate with their client right away to avoid costly portfolio repercussions from happening later on.

By creating an audit trail from the get-go, your firm can completely transform the process involved with preparing for an audit. No longer is it a stressful, unorganized, and disruptive endeavor. Instead, by taking a proactive approach, your firm can manage a potential audit with ease.

How to Turn Compliance into a Profit Center

Efficient and repeatable compliance processes can lead to better experiences which, in turn, can increase trust. The result is happier clients and higher firm revenue. Why? Because satisfied clients are much more likely to refer others if they have a positive experience.

Clients understand the intimacy involved with sharing financial information with a professional, and they don’t want to lead their loved ones to someone who won’t work solely in their best interest. They’re only going to refer an advisor if they have full faith in that advisor’s ability to provide their friends and family with a positive experience as well.

The competition amongst financial professionals is perhaps at an all-time high. As technology continues to advance, more opportunities are becoming available to your clients. If a client isn’t completely satisfied with the level of service they’re receiving from you, they have other options. They may turn to a competing RIA, virtual advisory firms, roboadvisors, or start-ups.

For this reason, your ability to showcase your value to your clients is more important than ever. Offloading time-intensive compliance tasks to a RegTech platform is an effective way to refocus your efforts on standardizing and improving the client experience.

Efficient Operations Lead to Cost Savings

Establishing repeatable compliance processes enables firms to lead more streamlined and efficient operations. The result is significant cost savings for your firm, as your team is able to take on more clients without adding more staff.

Rethink the Role of Compliance in Your Firm

By putting repeatable processes into place and addressing compliance concerns proactively, you can implement the necessary changes to improve the relationship between your compliance team and advisors. In fact, you can stop thinking of compliance as a drain on resources but rather a tool for making your team more efficient and confident.

The benefits of creating cohesion between regulatory practices and financial planning shouldn’t be understated. It can establish greater trust between your advisors and their clients, ultimately leading to increased retention and a new way to showcase value to current and new clients.

By improving your compliance programs with these measures, it becomes a revenue-supporting or even revenue-generating part of your practice.

RIA Compliance Technology Helps Your Bottom Line

Following up-to-date compliance processes isn’t a choice, it’s a necessity. And while many have always considered these regulatory rules as obligatory, and disruptive, parts of their firm’s operations, new advancements in technology are changing the narrative. In fact, finding the right tech partner gives your advisors the integrated workflows and accountability to lead the firm to achieve higher revenue, improve efficiency, and scale effectively.

The Nitrogen growth platform bridges the gap between compliance teams and advisors. If you’re interested in streamlining your processes and helping your advisors deliver an enhanced client experience, feel free to schedule a demo today.