In the ever-evolving landscape of compliance, investment advisory and broker-dealer professionals are increasingly turning to technology and third-party vendors to fulfill expanding regulatory requirements. Of those polled by Thomson Reuters for their 2023 “Cost of Compliance” report, 38% of compliance functions reported having outsourced some or all their compliance functionality, compared to 30% in 2022.[1] Respondents stated that the main reasons for outsourcing were the need to provide additional assurance, the lack of in-house skills, and cost.[2] Collaborating with reputable service providers is crucial for maintaining a robust compliance program, enabling firms to remain competitive and proactive in meeting regulatory expectations.
Compliance is not the only function that stands to benefit from outsourcing. At Core Compliance & Legal Services, Inc. (“Core Compliance”), we frequently receive inquiries from clients seeking information on third-party resources to support their business growth. Effectively vetting and aligning with third-party service providers not only enhances compliance efforts but also demonstrates an additional layer of internal control and protection for firms.
In this month’s Risk Management Update, we’re highlighting various vendors that our clients have utilized over the years. These vendors offer unique business and service models, resulting in diverse experiences for different firms. Therefore, it’s imperative for businesses to conduct thorough due diligence on vendors before engagement as well as periodically throughout the partnership.
We also want to remind industry participants of the SEC’s proposed rule on outsourcing and service provider due diligence (Rule 206(4)-11)[3]. To learn more about this pending rule and its potential impact on your business, please contact Core Compliance at (619) 278-0020 or schedule a call here.
Compliance Technology Solutions
Orion ComplianceTM – Orion Compliance™ delivers a simple, centralized compliance platform, enabling compliance personnel to focus on high-risk areas while meeting critical regulatory and documentation requirements. The dashboard-driven system consists of a flexible menu including compliance calendar customization, testing, certifications and attestations, gifts and entertainment monitoring, risk assessments, form builder tool, personal trading, whistleblower, and document library management.
orion.com/advisor-tech | (678) 819-1991
MyComplianceOffice – MyComplianceOffice (MCO) provides a software system for compliance requirements and employee trading activity management, as well as task management and workflow, compliance calendar building, attestation management, disclosure management, gifts and entertainment monitoring, case and document management, risk management and more.
mco.mycomplianceoffice.com | (866) 951-2280
Hadrius – Hadrius offers an AI-powered platform that packages your compliance tasks in one place. The platform features archiving and review for email and other communications, as well as automated marketing review powered by their own CompianceGPT. They also offer trade monitoring, attestations and disclosures review, and task management, all within the software.
www.Hadrius.com | (804) 293-0416
Custodians
Charles Schwab | Advisor Services – Charles Schwab Advisor Services (Schwab) offers Registered Investment Advisors three things: experience, partnership and investment. Schwab knows that firms value their independence but crave advocacy. Within their custodial services Schwab offers RIAs support, service, technology, access to tools and products, education, training, and more.
advisorservices.schwab.com | (877) 687-4085
Fidelity | Fidelity Institutional SM– Fidelity acknowledges that operating in today’s industry requires the right tools, resources, and support to drive future results. With Fidelity Institutional℠, firms have access to innovative technology and dedicated service to help evolve their business.
clearingcustody.fidelity.com | (877) 262-5950
Interactive Brokers, LLC – Interactive Brokers’ (IBKR) services make them a gateway to the world’s markets. Their services include multiple trading products and tools, custom trading technologies and platforms, and more.
interactivebrokers.com | (707) 559-3258
Continuing Education/Compliance Certifications/Training
FINRA Institute at Georgetown (CRCP)® Certification – The FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® program provides compliance, legal and regulatory professionals with an in-depth understanding of the foundation, theory and practical application of securities laws and regulations.
finra.org | (301) 590-6500
National Society of Compliance Professionals: Certified Securities Compliance Professional (CSCP) Certification – A CSCP designation distinguishes individuals with intermediate to advanced proficiency and a commitment to advancing securities compliance practices. This 14-week course, delivered online, grants one of three designations: Investment Adviser-Broker Dealer, Broker Dealer, or Investment Adviser.
nscp.org/about-cscp | (860) 672-0843
Quest CE – Quest CE offers compliance education and training opportunities for the financial services industry. In addition to offering continuing education (“CE”) for professionals holding insurance licenses and professional designations like the CFP and CPA, and designations, Quest CE also provides a complete spectrum of compliance training solutions.
questce.com/course-catalog | (414) 375-3400
RegEd, Inc. – RegEd boasts a comprehensive course catalog covering a variety of industry topics and educational needs, including annual compliance meetings, AML training, IAR and Insurance CE and much more. RegEd’s Annuities Training Platform (ATP) allows producers to complete the required state suitability and carrier-specific product training on their platform.
reged.com | (800) 334-8322
Securities Training Corporation® – The Securities Training Corporation (STC)® offers securities CE, securities licensing, insurance CE, and insurance pre-licensing and exam preparation licensing training in a classroom or self-study format. Their offerings are designed for professionals looking to start a career in financial services or insurance, with their wide range of study products constructed to prepare.
stcusa.com | (800) 782-1223
Electronic Books & Records Solutions
Broadcom Inc. – Broadcom® offers a comprehensive portfolio of identity-centric data loss prevention for IT security professionals. Broadcom offers a variety of technology solutions to protect all types of sensitive information and assets to help minimize accidental, negligent, and malicious misuse of data, as well as to help you remain compliant with regulations and corporate policies, and to reduce overall business risk.
broadcom.com | (800) 225-5224
Bloomberg Vault – As part of Bloomberg professional services, Bloomberg Vault offers a cloud-based information management service that delivers compliance, eDiscovery, and enterprise archiving by leveraging the scalability and reliability of Bloomberg’s global infrastructure.
bloomberg.com | (212) 617-6580
Electronic Mail Archiving & Surveillance Tools
Global Relay® – Growing up with the financial industry, Global Relay has built reliable secure solutions for electronic messaging, allowing you to mitigate risk and stay ahead of evolving regulation with fully integrated solutions for every step of your compliant communications journey.
globalrelay.com | (866) 484-6630
Intradyn – Understanding the industry is overrun with options, Intradyn has designed a full line of innovative archiving solutions to solve your most pressing business challenges, specializing in email, social media, and mobile communication archiving.
intradyn.com | (888) 997-5153
Smarsh – Smarsh offers companies their approach to capturing, storing, and monitoring communications, specializing in e-communication archiving. Digital communication content is easily searchable, and captured in its original, unaltered format with conversational context included.
smarsh.com | (503) 946-5980
Errors & Omissions (E&O) Insurance
Chubb – As a global provider of insurance products, Chubb provides solutions and coverage for property and casualty, accident and health, life insurance, cybersecurity, professional liability, and more. They are the largest publicly traded property and casualty company in the world.
chubb.com | (866) 324-8222
Marsh McLennan – Marsh McLennan is a global risk and insurance services firm, providing coverage for a variety of exposures, including mergers and acquisitions, financial and professional liability, operational risk, cyber risk, and more.
mmc.com/solutions | (212) 345-5000
Starkweather & Shepley Insurance, Brokerage Inc. – Starkweather & Shepley offers a full range of cost-effective commercial insurance and risk management solutions, including a variety of business insurance, risk management solutions, and related services worldwide.
starshep.com/services | (800) 854-4625
GIPS® Verification and Performance Services
CAPS Inc. – CAPS provides a unique approach to investment data organization and analytics by designing and deploying a CAPS software solution, allowing for GIPS® reporting, outlier analysis, performance reports, risk measures, and more.
capsinc.com | (407) 930-3590
Deloitte – As a multiservice company, Deloitte offers a comprehensive suite of services to a multitude of industries. Regarding GIPS®, they leverage dedicated GIPS® eminence centers throughout North America, Europe, and Asia, to help their clients learn of developing local and international trends and issues.
deloitte.com | (212) 492-4000
Private Fund Administration
Hedge Solutions, Inc. – Hedge Solutions is a risk management consulting company, advising clients on hedging, purchasing and marketing strategies to grow and safeguard their businesses. Using their web-based Hedge Insite software, clients can utilize a workspace for managers to build a financial simulation of their business and test a variety of possible scenarios in advance.
hedgesolutions.com | (603) 644-3343
Opus Fund Services, LLC – Opus Fund Service provides hedge fund administration, including NAV production, portfolio accounting, and portfolio reconciliations – regardless of complexity or fund size.
opusfundservices.com | (312) 256-9974
SS&C Technologies Holdings, Inc. – SS&C Technologies Holdings (NASDAQ: SSNC) provides fund administration services for hedge funds, fund of funds, hybrid/infrastructure funds, registered funds, family offices and more, SS&C also offers back office, middle office, and front office software for alternatives investment managers.
ssctech.com | (646) 713-0601
Private Fund Auditing Firms
EisnerAmper, LLP – As a global firm serving a broad spectrum of financial services and high net worth clients, EisnerAmper offers a full range of accounting, tax and consulting services. Hedge fund advisory services include hedge fund audit, accounting and administration, and tax services.
eisneramper.com | (415) 357-4216
KPMG, LLP – With their worldwide presence, KPMG is an international firm that provides audit, tax and advisory services and industry insight to help organizations negotiate risks and perform in the dynamic and challenging environments in which they do business.
kpmg.us | (858) 750-7100
Marcum, LLP – As a national accounting and advisory services firm, Marcum LLP provides a full spectrum of traditional tax, accounting, and assurance services. Audits are specifically aligned with the client’s business functions but go beyond just the financial.
marcumllp.com | (855) 627-2861
HR Administration Support
Justworks – Justworks streamlines payroll, benefits, employee-related compliance, and HR tools into an all-in-one online solution. Working exclusively with small and mid-sized businesses, Justworks offers 24/7 customer support and flat-rate, transparent administration fees. As a PEO, for those who are looking for benefits they also specialize in accessing better and more affordable health insurance for small teams.
justworks.com | (646) 798-1787
ADP® – ADP offers HR administration and technology solutions for the internal workings of your firm. On top of AI automation solutions, their services include HR services, talent acquisition, time and attendance monitoring, benefits administration, payroll maintenance and more.
adp.com | (833) 320-0196
Coastal Payroll® – Coastal Payroll specializes in human capital management, which includes human resources, benefits administration, time and attendance, and more. Their suite of offerings also includes payroll, time keeping, talent acquisition, benefits, human resources, and custom integrations for your specific business.
coastalpayroll.com | (858) 565-2123
Paychex® – Paychex, Inc. (NASDAQ: PAYX) is a provider of integrated human capital management solutions for payroll, benefits, human resources, and insurance services. Paychex also offers an all-in-one HR software, which is customizable and scalable to any growing business.
paychex.com | (833) 729-8200
TriNet Professional Services – TriNet offers HR administration expertise including payroll processing, risk mitigation, as well as HR and payroll advisory services. TriNet allows your business the opportunity to offload administrative tasks and paperwork associated with HR functions.
trinet.com | (888) 874-6388
Portfolio Accounting and Trade Management Systems
Charles River Investment Management Systems – Charles River provides the industry with a unique approach, including their Charles River Investment Management Solution (Charles River IMS). Their platform automates front and middle office processes for buy-side firms. The solution helps enable accurate and timely investment decision support for institutional and wealth managers, alternative investment firms, insurers and asset owners.
crd.com | (781) 238-0099
SS&C | EZE – As one of the many solutions offered by SS&C Technologies, EZE provides comprehensive technology solutions to broker dealers, hedge funds, institutional investors, private equity funds, and others.
ezesoft.com | (929) 733-7332
SS&C | Advent – Another offering provided through SS&C Technologies, Advent offers innovative investment management solutions for asset management, wealth management, and alternative investment business needs to optimize their workflows.
advent.com | (800) 727-0605
Envestnet | Tamarac® – As a division of Envestnet® (NYSE:ENV), The Tamarac platform combines trading and reporting in a single intuitive software interface to automate your model portfolio construction and management, monitor your accounts for trading triggers, make tactical trades, execute trades directly with your broker, and more.
tamaracinc.com | (866) 525-8811
Proxy Voting Services
Broadridge Financial Solutions – Broadridge’s secure, state-of-the-art ProxyVote™ digital platform enables securityholder participation through a streamlined, intuitive, branded online experience.
broadridge.com | (800) 353-0103
Glass Lewis and Co. – Glass Lewis brings decades of expertise to the proxy voting and governance process to give you a fast, flexible, and transparent end-to-end solution. Their proxy voting platform, Viewpoint, offers a flexible and user-friendly interface.
glasslewis.com | (415) 678-4110
Cybersecurity: Vulnerability Assessments & Penetration Testing
Altius IT – Altius IT is a security audit company with certified auditors to help firms meet their security and compliance requirements. Their unique approach to cybersecurity includes IT audits and penetration testing, privacy and compliance audits, mobile application security, and website security testing.
altiusit.com | (714) 794-5210
Secureworks® | TaegisTM – As a product from Secureworks, Taegis, a cloud-native security analytics platform, improves your ability to detect advanced threats, streamline and collaborate on investigations, and automate the right actions.
secureworks.com | (877) 838-7947
Xantrion – Xantrion provides enterprise-grade IT services to midsized businesses. Their custom offerings include IT roadmaps, IT support, proactive monitoring, backup and recovery services, security services, cloud strategy, and more.
xantrion.com | (510) 272-4701
Cybersecurity and CCO Liability Insurance
National Associate of Professional Agents – National Associate of Professional Agents (NAPA) insurance programs provide RIAs and financial planners with coverage to help protect against the financial burden created by a data breach.
napa-benefits.org | (800) 593-7657
Starkweather & Shepley Insurance, Brokerage Inc – Starkweather & Shepley can work with your firm to secure options for coverage that mitigates the operational risk of running a business. Since cyber liability insurance is not standardized it is important to work with a good agent to help define the coverage needed and negotiate the terms. The cost will vary widely depending on the coverage.
starshep.com | (800) 854-4625
The Hartford – The Hartford helps businesses prepare for a cyber breach by providing a suite of comprehensive, variable coverages that respond to the ever-expanding list of cyber threats.
thehartford.com | (855) 440-1078
Windermere Insurance Group – Windermere Insurance understands the exposures and inherent risks that threaten your business and personal assets. They aim to help businesses prepare for a cyber breach by providing a suite of flexible coverages.
windinsgroup.com | (888) 655-6507
For more information, please contact us at info@corecls.com, at (619) 278- 0020 or visit us at www.corecls.com.
Core Compliance works extensively with investment advisers, broker-dealers, investment companies, hedge funds, private equity firms and banks on regulatory compliance issues. This article is for information purposes and does not contain or convey legal or tax advice. The information herein should not be relied upon in regard to any particular facts or circumstances without first consulting with a lawyer and/or tax professional. Furthermore, Core Compliance has not conducted thorough due diligence on the third-party vendors listed herein and does not endorse, sponsor, or recommend the vendor’s products, services, and/or activities. The information is for convenience only and used as a reference for interested parties.
[1] See 2023 Cost of Compliance Report: Regulatory burden poses operational challenges for compliance officers – Thomson Reuters Institute
[2] Id.
[3] Proposed rule: Outsourcing by Investment Advisers (sec.gov)
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