Stay Compliant or Grow? You Don’t Have to Choose

I hear a lot about firms that are growing—and sometimes they grow FAST. Whether they’re expanding through acquisitions, ramping up their marketing, or simply benefiting from fantastic word-of-mouth, one big concern often looms large: “How can I ensure I’m staying compliant during this rapid growth phase?”

It can feel overwhelming to juggle compliance while trying to scale your business. But here’s the good news: you don’t have to choose between staying compliant and achieving growth. With the right strategies in place, you can navigate the regulatory landscape without stifling your momentum.

1. Regularly Review Compliance Policies and Procedures

Growth involves a lot of change. You’re adding technology, updating processes, and bringing in different vendors; you’ll want to go back through your compliance policies and procedures and make sure they are updated to reflect any changes.

Here’s another tip: Don’t make your compliance manual just a static document. Build in some flexibility so that as your business grows, you don’t have to return constantly to revise it.

2. Utilize Compliance Technology

A scary amount of firms are still stuck in the past. Working with Excel spreadsheets and spending countless hours grappling with formulas that feel like they belong in the bygone era. There are a ton of robust, easy-to-use compliance technology solutions available that can streamline processes and make staying compliant during growth more manageable.

With the right tools, you can free up valuable time and resources, allowing your team to focus on what they do best: growing your business.

3. Training: Never Stop Learning

Training isn’t just about checking a box. As your business grows, both your processes and policies will evolve and it’s crucial to make sure your team stays aligned with these changes. Regular training sessions should be a staple in your firm’s calendar.

Start by training yourself and your staff on the latest compliance requirements and any updates to your policies. This isn’t just a one-time event; it’s an ongoing commitment. New employees will join as you expand, and it’s vital that they understand your compliance framework from day one.

When onboarding, make sure everyone knows the boundaries that govern their roles. They should be fully aware of the dos and don’ts, as well as know who to turn to for support.

Remember, compliance isn’t just about rules; it’s about creating an environment where everyone understands the importance of staying compliant and feels empowered to ask questions.

4. Stay Up-to-Date with Industry Changes

There’s so much regulation coming right now. And it’s not going to stop. Firms need to stay informed and be proactive. Go to the SEC’s website and look at their press releases while you’re drinking your coffee in the morning.

Don’t just skim the headlines; dive into the details. Understand what the new enforcement actions and litigation releases actually mean and how it might apply to your firm. This knowledge helps you identify potential pitfalls and align your compliance strategy with regulatory expectations. Remember, being proactive is far better than playing catch-up after a compliance issue arises.

Also, consider subscribing to our weekly newsletter or joining professional networks where compliance updates are discussed. Engaging with your peers can provide additional perspectives and strategies for managing compliance effectively during periods of growth.

5. Communication is Key

When your firm is experiencing rapid growth, effective communication becomes more critical than ever. You need to ensure that everyone—your team, clients, and vendors—are kept in the loop about changes and developments.

Start by maintaining open lines of communication within your team. Regular updates about new processes, technologies, or regulatory changes can help everyone feel more secure and informed. When employees understand the context of changes, they can better align their work with the firm’s compliance objectives.

Don’t forget about your clients! Keeping them informed about market volatility, advisor changes, or technology updates is essential. When clients understand the reasons behind these changes, they’re more likely to see the positive impact on their experience. Make it a habit to check in with clients regularly during periods of growth, ensuring they know you’re there to support them every step of the way.

6. Documentation & Record Keeping

Regulatory compliance requires a mountain of documentation. When you’re going through a period of rapid growth, there might be a lot of people helping with a lot of different things. All of that documentation has to be saved in your books and records location.

Make sure people are communicating through the appropriate channels. Off-channel communication—like casual emails or text messages—can lead to confusion and potential enforcement actions from the SEC.

Here’s a few more tips:

1. Avoid relying on outdated methods, like filing cabinets, and consider transitioning to a cloud-based electronic storage system. This not only enhances accessibility but also secures your documents against loss.
2. Think about establishing a consistent naming convention now. As your firm grows, this will help everyone stay organized and make it easier to retrieve documents when needed.
3. Make sure that team members can access the information they need to do their jobs but restrict access to sensitive materials to only those who actually require it.

As you grow, keeping your records organized will help you avoid costly mistakes and ensure that you’re always ready for any regulatory inquiries.

Your Internal Compliance Team Might Be Slowing You Down

Internal compliance teams often earn a reputation as the “Department of No,” frustrating advisers for several reasons

• Lack of Training: Many compliance staff members lack consistent training and have roles that vary widely across firms. It’s common to find managers who have never actually performed compliance testing, leaving them unprepared for the demands of the job.
• Lack of Resources: Compliance teams are frequently viewed as an expense rather than a critical component of business protection. This perception often leads to insufficient resources for training, staffing, and technology, risking costly fines down the line.
• Increased Regulation: The flood of new regulations over the past several years can feel overwhelming. While regulators may offer extensions for compliance, this doesn’t alleviate the operational challenges that arise from new rules. Often, insights into regulatory expectations come only after enforcement actions reveal compliance failures.

This can be A LOT to handle, especially when internal compliance teams are stretched thin. That’s why many firms are turning to our outsourced compliance department. My RIA Lawyer provides the expertise and support needed to navigate the complexities of legal and compliance issues, allowing your firm to focus on growth without sacrificing compliance.

Contact us today to discuss how we can help your firm stay compliant during growth.