RIA Review System

RIA Review is a user-friendly online compliance and operations management software designed to help boutique investment advisors to structure, to maintain, and to develop their compliance programs.

Our Review Center allows solo-advisors, internal staff, and/or consultants to create a maintenance schedule to update their firm’s policies and procedures as needed.

For Solo-practitioners (CCO’s):

  • Review the calendar/setup alerts for general deliverables
  • Complete deliverables or elect responsibility to a third-party (i.e. consultant)
  • Make a schedule to review policies/procedures (i.e. once a quarter, six months, year)
  • Use the checklists (State or SEC) to review policies/procedures
  • Update forms (if needed)
  • Store records online using the cloud

For Staff/Compliance Staff:

  • Pick a staff member to assume responsibility for compliance (or designate as CCO)
  • Review the calendar/setup alerts for general deliverables
  • Complete deliverables or elect responsibility to a third-party (i.e. consultant, staff, attorney)
  • Make a schedule to review policies/procedures (i.e. once a quarter, six months, year)
  • Use the checklists (State or SEC) to review policies/procedures
  • Update forms (if needed)
  • Store records online using the cloud

Yes, we are in the process of adding capabilities from other service providers. We will consider more in the near future.

  1. Go to the Login Screen
  2. Click on Forgot my password
  3. Follow the prompt and instructions


SEC/State Compliance Program

All firms should login to the calendar section to access the general overview of annual firm requirements (i.e. to-do list of items to file with regulators and/or send to clients annually).

All firms must first register here: http://www.riareview.com/Account/Register

Note: The calendar is not an exhaustive list of every reporting requirement that may apply to your particular firm. Feel free to contact us for an interpretation of requirements.

As a part of Rule 206(4)-7, SEC-registered investment advisers (under the Investment Advisers Act of 1940) must:

  1. Develop Policies and procedures: Adopt and implement written policies and procedures reasonably designed to detect, identify, or prevent violations of the investment advisors act.
  2. Conduct an Annual review: Review, no less than annually, the adequacy of the firm’s policies and procedures. (i.e. updates, forensic testing, risk assessment, etc.).
  3. Designate a Chief compliance officer: Designate an individual (who is a supervised person) responsible for administering the firm’s policies and procedures.

Some states, such as Washington and Florida, require firms to conduct an annual review of their firm’s policies and procedures. Other states recommend firms to conduct an annual review, along with maintaining a compliance manual of firm policies and procedures.

Note: State advisors may refer to the SEC’s annual review guidelines as mentioned above.

  1. Annual Offer Letter – firms should send clients a: (1) Summary of Material Changes, (2) Offer for complete ADV brochure, and (3) a copy of firm privacy policy notice.
  2. ADV Annual Updating Amendment – Most firms must file an: (1) Annual Updating Amendment within 90 days after the firm’s fiscal year end (each year).
  3. Financial Statements – State-registrants with: (1) Discretionary authority and/or (2) Custody of assets may be required to file annual/quarterly/monthly statements with state regulators.
  4. 13F Filing – Institutional firms with more than $100 million in 13F reportable securities must make an Edgar filing within 45 days after calendar quarter end.


Private Funds

As defined by Rule 206(4)-2, of the investment advisors acts, these entities are:

  1. "Independent representative" means a certified public accountant or attorney who: Acts as agent for an advisory client, including in the case of a pooled investment vehicle, for limited partners of a limited partnership, members of a limited liability company, or other beneficial owners of another type of pooled investment vehicle and by law or contract is obliged to act in the best interest of the advisory client or the limited partners, members, or other beneficial owners;

    Is engaged by you to act as a gatekeeper for the payment of fees, expenses and capital withdrawals from the pooled investment;

    • Does not control, is not controlled by, and is not under common control with the investment adviser, investment adviser representative, or any related entity; and
    • Does not have, and has not had within the past two years, a material business relationship with the investment adviser, investment adviser representative, or any related entity

  2. "Qualified custodian" means the following independent institutions or entities that are not affiliated with the adviser by any direct or indirect common control and have not had a material business relationship with the adviser in the previous two years:

    A bank or savings association that has deposits insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act

    A licensed broker-dealer holding the client assets in customer accounts;

    • A registered futures commission merchant registered under Section 4f(a) of the Commodity Exchange Act, holding the client assets in customer accounts, but only with respect to clients’ funds and security futures, or other securities incidental to transactions in contracts for the purchase or sale of a commodity for future delivery and options thereon; and
    • A foreign financial institution that customarily holds financial assets for its customers, provided that the foreign financial institution keeps the advisory clients’ assets in customer accounts segregated from its proprietary assets.


Custody

All firms:

  • Who are advisors (or sub-advisors) to private funds (e.g. pooled investments vehicles) with authority to transfer assets/funds.
  • Who are trustees or have power of attorney (e.g. check writing authority or authorization to move money from a client’s bank/brokerage to a third party outside of role of discretionary trading authority).

SEC Firms:

  • Who accepts a prepayment of $1200 or more for (six months or more) of advisory services.

States firms (most states*):

  • Who accepts a prepayment of $500 or more for (six months or more) of advisory services. *Pennsylvania firms are deemed to have custody if they accept a prepayment of $1200 or more for (six months or more) of advisory services.


Business Continuity/Succession Planning

Business Continuity Planning:

According to Rule 204-2 (books/records) of the investment advisors act (and similar state rules): Firms should test and regularly update their business continuity plan at least once a year.

Succession Planning:

While drafting a plan to satisfy the SEC’s latest amendment to Rule 204-2 (and similar state rules), advisors should consider the firm’s operational/legal components. In the event of the death/incapacitation of a advisor/owner: (1) who immediately takes over to safeguard assets (operational duties during an emergency), and (2) what legal agreement is in place if the death/incapacitation of an advisor/owner prompts an estate issue* with any heirs of business, regulators, and/or other employees.

Paid software users may use our:

(1) business continuity form to organize vendors and (2) conduct testing.


Fees

Advisory/Portfolio Management Fees:

  1. AUM based fee: Can range from anywhere between .50% - 2.5% (50 to 225 basis points)

Financial Planning Fees:

  1. Flat Fee: Typically range from $500-5000 or more depending on complexity of client
  2. Hourly rate: $200 and up

Consulting Fees (generally hourly structure):

  1. Hourly: $200 and up.

Note: The following is a general estimate based on research from our compliance consulting partner: RIA Consults – Roberson Consults Group.

ADV Reporting: Item 5

According to Rule 205-3 of the investment advisors act (also applies to state-registrants),

Clients must have:

  • $1 million in investable assets or $2.1 million* in net worth

Pre-2011 clients: Will be grandfather into the "pre-2011" thresholds ($750,000 in assets with firm or $1,500,000 in net worth). Firms can continue to rely on grandfather clauses for these types of clients.

Effective 8/15/2016, threshold limits were increased from $2 million to 2.1 million to factor in inflation.

ADV Reporting: Item 6


Client Agreements

Generally, there are four types of agreements to enter into an advisory relationship with client and/or prospect. This is outside of: (1) Brokerage agreements (2) Estate agreements, and/or (3) Subscription documents (for private fund investors)

Advisors Contracts:

  1. Advisory Contract (aka “Investment Management Agreement)
  2. Consulting Agreement
  3. Financial Planning Agreement
  4. Solicitor Agreement


Books / Records

According to Rule 204-2 (books/records) of the investment advisors act (and similar state rules)

Firms should keep client records

  • At least five years from the fiscal year-end date of last client transaction/activity. Records may be kept in print or electronic format.