High Profiled Risks Associated With Investment Advisory Firms

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) has been issuing written Risk Alerts since 2011 that outline areas the SEC believes carry high risks for broker-dealers and investment advisers.  The areas covered in these alerts have included:

  • Social Media
  • Custody
  • Whistleblower Protocols
  • Cybersecurity
  • Business Continuity Plan
  • Due Diligence of Alternative Investments
  • Outsourcing CCO Role
  • Supervision Practices

Additionally, some Risk Alerts have announced upcoming SEC focused exam areas, such as cybersecurity, advising retirement investors, and supervision of multi-branch offices.

Recently, CCLS wrote a Risk Management Update that discusses three of the high profiled risk areas as they pertain to investment advisers and provides guidance on addressing these risks.  The article also includes a list of compliance steps for implementing an effective risk assessment and monitoring program.

As firms grow, new risks can crop up.  So, it’s important for advisory firms to perform annual risk assessments to help ensure they have identified and addressed all associated risks.  If you haven’t performed a detailed risk assessment to date, now is the time to begin.

Risk assessment reviews are a core Core Compliance service offering and our consultants are very experienced in risk mitigation.  For assistance, please contact us at (619) 278-0020 or visit us at www.corecls.com for more information.

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