By Matthew Edward
Regulations present wealth managers, stockbrokers, and other financial professionals with a complex minefield of rules to maneuver through if they want to properly serve investors. Fortunately, regulatory requirements can be simplified by a good compliance consultant, one who understands that service providers want to spend less time on rules and red-tape, and more on helping clients achieve their financial dreams.
“Investment advisors have the same fears as the general public. They fear the unknown as well, and often times compliance is a portion [of the industry] they are not familiar with and it scares them,” said Cathy Vasilev, founding member of Red Oak Compliance Solutions, LLC.
Red Oak Compliance Solutions works with broker- dealers and investment advisors to relieve their regulatory burdens, minimize risk, and contain the costs associated with ensuring everything is above-board. The firm, based in Cedar Park, Texas, provides a level of compliance expertise that many advisors likely lack in-house, Vasilev told “Advisors Magazine” during a recent interview.
Compliance problems can cost firms big. In May, the North American Securities Administrators Association (NASAA) announced a settlement between firm LPL Financial, LLC, and several state securities regulators for more than $26 million in civil penalties. LPL Financial had failed to maintain reasonable policies to prevent the selling of unregistered, non-exempt securities to customers, according to the NASAA decision.
Red Oak Compliance Solutions helps clients avoid costly regulatory mistakes through careful risk management, trained compliance professionals, and software products for smaller advisories. The firm uses the proprietary AdMaster Compliance™ software, which allows financial services companies to submit marketing materials and have them reviewed for regulatory pitfalls. The AdMaster software now serves more than $10 trillion under management with both large global firms and small single person advisers. The firm plans to release new software products soon, again, targeted at smaller advisors who may not need the industrial- strength computer programs used by thousand-employee conglomerates.
Compliance starts with education, Vasilev said. Red Oak Compliance Solutions is in communication with clients “on a daily basis” with information on shifting regulations, new rules, and emerging best- practices.
“We’re constantly educating them on the rules, the regulations … every new investment advisor that we register, they automatically receive compliance training before they start their business,” she said.
The dead-for-now Department of Labor fiduciary rule, which the Fifth Circuit Court of Appeals vacated last March, presented the firm with the sort of shifting, ambiguous landscape it’s suited to help investors in. The firm adopted a “minimal” approach to the rule until it was finalized, Vasilev said, adding that some features are being kept and implemented by Red Oak Compliance Solutions as a best practice even though they are not official regulations. “Some of the things that were instituted for the [fiduciary rule] we are keeping,” Vasilev said, pointing to mandated product fee comparisons and rules around information disclosures. “We’ve kept them even though it’s not required because it’s just a good educational tool that all clients should be provided by their advisor.”
Red Oak Compliance Solutions provides tailored client services. Every advisor has different regulatory concerns, and Vasilev’s team works to provide advice suited to the right context. Compliance training also helps clients work regulatory needs into their everyday work, so that they can serve investors without skipping a beat.
“They need to understand how to do this without affecting their service levels to their clients,” Vasilev said.
The result? Advisors can do what they do best without drowning in endless rules, regulations, and paperwork.
“We’re passionate about compliance, they’re passionate about their clients,” Vasilev said.
For more information, visit: redoakcompliance.com
ADVISORS MAGAZINE – JULY p.81 – Check out the full article here
About Red Oak Compliance Solutions
Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.
