8 Simple Ways Financial Advisors Can Stay Compliant

Practice Management 5 min • 2 May 2024

Did you know that only 17% of advisors are using compliance technology on a daily basis? Yet nearly half of advisors are spending three or more hours each week on Reg BI compliance alone!

Even though compliance is famously regarded for its tediousness, many professionals have yet to embrace financial advisor tools that can speed up the process and free up more of their time.

If you’re thinking of easing your firm’s compliance burden, we have you covered – here are eight simple ways you can ensure you and your firm will stay compliant.

Financial Advisor Tools: 8 Easy Ways to Stay Compliant

1. Automate whenever possible

One of the best ways to make compliance tasks easier is to simply remove them from your to-do list by allowing automation tools to do the work for you. Of course, there are compliance tasks that cannot be automated, but if you can identify and automate the tasks that can, you could save yourself countless hours.

Many advisors spend a day each week (or more) on regulatory tasks alone. When you let software handle repetitive tasks like account aggregation and report generation, you’re left with more time to meet with clients, grow your prospect list, and find new ways to stay proactive about compliance.

Nitrogen uses Firmwide data to feed automation for client onboarding. When firms set up their data feed, all client data becomes immediately available, virtually eliminating onboarding time altogether.

2. Standardize your proposals

According to the 2024 Growth Survey, roughly 90% of advisors believe having dedicated tools for client communication and proposal generation is important – yet only about one-third are actually using such tools. Similarly, only one-third of advisors reported having any sort of standardized proposal generation process throughout their advisory firm.

With the Proposals Dashboard in Command Center, you can determine how many of your active clients, leads, and prospects have Risk Numbers and which advisors are building proposals in alignment with clients’ risk tolerance.

These proposals:

Can be generated in just moments
Are customized to the prospective client
Offer a compliance-friendly audit trail
Ensure a consistent client experience

3. Put clear data behind all those “What if…?” conversations

Showing clients potential scenarios brings a new level of understanding and clarity to the conversation.

With Detailed Portfolio Stats, you can test portfolios and proposals against hypothetical regulatory changes, all through the lens of risk. It also allows you to show regulators exactly what drove your recommendations in the event of an audit.

4. Pinpoint risk misalignment with ease

The most valuable wealth management tools are the ones that facilitate proactiveness over reactiveness.

For example, the Holdings Dashboard in Command Center gives your firm the tools to see when accounts or portfolios have drifted out of alignment with their targets. Now your firm can address any problems before they actually occur – saving you time and keeping your accounts compliant.

5. Keep client data and credentials safe

Maintaining client confidentiality and cybersecurity is critical to staying compliant. In fact, the SEC has nearly doubled the size of its cybersecurity teams in recent years to facilitate more focus on digital safety.

Whether you’re meeting with clients virtually or asking for prospects’ logins for outside accounts, it’s key to have a standard, secure process in place, so you’ll be prepared if the SEC comes knocking.

Nitrogen’s Outside Asset Sync allows your clients to login to their held-away accounts , so you don’t have to spend hours manually entering in holdings.

6. Eliminate manual spot-checking

Traditional methods of spot-checking simply don’t allow you to check your entire book of clients, and attempts to do so could take weeks of your time.

The Holdings Dashboard on the Nitrogen Platform provides real-time account updates and customizable alerts, so you can confirm current holdings match the investment advisory agreement for each and every client. Set Investment Objective ranges and Risk Target ranges so you know what may be out of alignment.

7. Use data-based insights to create a consistent client experience

Leveraging insights that are backed by real client data can help streamline client experiences, making them consistent and compliant. By analyzing client data, advisors can customize their services to meet individual needs while maintaining the standard regulations.

Nitogren’s Check-Ins tool allows advisors to take a pulse check on their client’s psychology. Advisors get data points on how their clients are feeling about the markets and their financial future. This allows them to take action at the first sign of trouble, while also ensuring they are providing clients with the appropriate plan based on their unique data. Additionally, Nitrogen’s Insights Dashboard gives executives the ability to see which advisors’ clients are nervous, fearful, happy, or confident with their financial plans, ensuring their advisors are assisting their clients properly.

8. Embrace built-in documentation

Lastly, let’s talk about the golden rule of compliance: Document everything.

Documenting every client interaction and correctly storing those records is crucial for compliance with SEC laws (especially now, as document retention is a current focus of the organization).

Nitrogen keeps a paper trail of current and past portfolios, proposals, and risk tolerance questionnaires, creating a complete and auditable trail you can access at any time. No more scrambling to gather paperwork for audits – we’ve got you covered.

These eight easy wins can free up your time and reduce your compliance burden along the way. The best part? With an intuitive platform and easy implementation like Nitrogen, you can begin tackling compliance more efficiently right away.

Keep Compliant with the Nitrogen Platform

Ready to automate your compliance tasks with a comprehensive business wealth management platform? Click here to schedule a complimentary demo of Nitrogen today.

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