Regulate THIS! A RIA-ly Unfiltered Podcast
SEC Audits: Don’t Sweat It (But Take It Seriously)
Insights from the “Regulate THIS!” podcast with Tracie Behr and Leila Shaver
As a registered investment advisor, few phrases can trigger anxiety quite like “SEC exam.” However, as compliance experts Tracie Behr and Leila Shaver explain in their candid podcast, these audits don’t have to keep you up at night—as long as you’re doing things right from the start.
The Reality of SEC Exams
Many firms panic at the mere mention of an audit, but the truth is simpler: if you’re following proper compliance practices day-to-day, you likely have what you need to succeed. The key is documentation and preparation.
“As long as you’re doing the things you need to do on a regular basis, you probably have what you need,” says Tracie. “And as long as you’re documenting and have all your ducks in a row to start out, you probably are already better off than most people.”
That said, it’s dangerous to assume your next audit will go well just because a previous one did.
The Cost of Poor Compliance
The financial services industry offers tremendous opportunities for wealth creation—both for advisors and their clients. But that opportunity comes with responsibility.
“The financial services industry is really regulated, and firms and advisors have this amazing opportunity to frankly make a lot of money in this industry while helping a lot of people leave behind a legacy for their families,” Leila explains. “But that means you have to be willing to deal with the regulation.”
The Critical Role of Your CCO
Perhaps the most emphasized point in the discussion was the vital importance of having a qualified Chief Compliance Officer—whether in-house or outsourced.
“You have to understand how key your CCO is,” says Leila, sharing a personal experience: “I was CCO of a firm… when the SEC announced the exam, of course I flew out, went on site… the SEC basically sat there and said ‘Leila, if you’re comfortable, we are.'”
That’s the difference a strong CCO makes—they can confidently represent your firm and demonstrate a thorough understanding of your operations, risks, and compliance measures.
Bottom Line: Take Compliance Seriously
As Laila bluntly puts it: “If you don’t like it, don’t do it. Give it to someone who knows how to do it. Find a compliance nerd to get it done for you.”
Remember, as Tracie and Leila conclude: “Good compliance is good business.”
Author Bio
Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.
Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.