Compliance Resolutions for the New Year

by Beth cacciotti on December 28, 2015

By Les Abromovitz


Since it’s the New Year, now is the perfect time for Chief Compliance Officers (“CCOs”), principals, and senior management to make resolutions to keep their firms compliant. The consequences of noncompliance can ruin anyone’s year.


At the top of the list, CCOs, principals, and senior management should resolve to be more positive and proactive regarding the firm’s compliance policies and procedures. Having a lackadaisical attitude about those policies and procedures sends the wrong message to members of the firm. It also increases the likelihood that these policies and procedures will be violated. During a Registered Investment Adviser’s (“RIA”) interim and annual reviews, as well as during a Broker-Dealer’s (“BD”) FINRA Rule 3120 testing, firms should ensure that their policies are reasonably designed to prevent violations of compliance rules and regulations.


Firms should also resolve to protect senior investors. Protecting senior investors is a high priority for the SEC, FINRA, and state securities regulators. Firms should pay special attention to advertising and marketing aimed at senior investors. They should also focus on the basis for recommendations made to senior investors relating to life events, such as IRA rollovers.


RIAs and BDs should resolve to bolster their efforts to protect clients and the firm from cyber-attacks. These efforts should begin with a careful review of the SEC’s Office of Compliance Inspections and Examinations’ cybersecurity Risk Alert, which was accompanied by a five-page sample document request letter. Both documents can be found at


RIAs and BDs should resolve to conduct a reality check of their advertisements. They may be making promises and guarantees their firms will not be able to keep. Firms should be able to prove advertising claims with objective evidence.


In addition, firms should resolve to fill the gaps in their compliance programs by acquiring knowledge and expertise that might not be available in-house. Many firms turn to compliance consulting firms to fill in the gaps in their knowledge. Some firms might even benefit by outsourcing compliance to a third party.


Finally, RIAs and BDs should resolve to read the January 2016 newsletter, which will take a more thorough look at compliance resolutions.


Les Abromovitz is a senior consultant with the recently merged firms, National Compliance Services (NCS) and Regulatory Compliance, LLC, and the author of two books on compliance for investment advisers, including The Investment Advisor’s Compliance Guide, published in 2012 by the National Underwriter Company.  Les can be reached by calling (561)330-7645 (ext. 213) or by e-mailing

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