Your 2025 RIA Compliance Checklist: Insights from a Leading Expert

The world of financial advisory is constantly evolving, and so are the regulations that govern it. As we look to 2025, understanding the SEC’s top priorities and navigating common deficiencies is crucial for protecting your firm and clients.

Recently, our own expert, Michelle Atlas-Quinn, was featured in a Q&A video produced by the Financial Experts Network. The session provides a deep dive into the most pressing compliance topics facing advisors today. 

Top SEC Priorities: A Fiduciary's Guide to 2025

The SEC has made it clear that its primary focus for the year ahead will be on a handful of high-stakes areas. Our expert's discussion provided clarity on the risks that should be on every advisor's radar.

• Communications Compliance: The use of personal devices and platforms like text messages for business communications continues to be a major source of compliance deficiencies. The session emphasized the need for firms to either explicitly prohibit off-channel communications or use technology to capture and archive them.
• Excessive Fees: The conversation highlighted that the SEC is scrutinizing fee arrangements to ensure they are reasonable and fully disclosed. Advisors who combine a flat fee with an AUM fee, or whose fees are significantly higher than regional competitors, must be prepared to justify the additional value they provide.
• The Custody Conundrum: The Custody Rule remains a top priority. Insights were shared on the complexities of Standing Letters of Authorization (SLOAs), which, while providing a procedural exemption from a surprise audit, still require meticulous documentation.

High-Stakes Practices: What to Watch Out For

The discussion also provided practical guidance on some of the most common and high-risk situations advisors face.

• Managing Family Accounts: It is acceptable to advise family members, even if you charge them zero fees. However, the expert underscored the absolute necessity of having a signed investment advisory agreement in place to grant you trading authority and properly document the relationship.
• The Audit Reality: Advisors learned that modern SEC audits are not random. Instead of showing up unannounced, examiners use data to pinpoint specific client files they want to review. Being prepared means having your digital records organized and easily accessible.
• Logging into Client Accounts: The expert shared a stern warning about the dangers of advisors logging into a client’s account, even for view-only purposes. This practice, if not properly documented with the client present, is a major red flag for regulators and can lead to severe consequences.

To get the full breakdown and earn CE credit, be sure to watch the full Q&A from the Financial Experts Network.

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