Ep 68: How to Build a Culture of Compliance in Your Practice

Financial Advisors Want to Know: How to Build a Culture of Compliance in Your Practice - Ep 68 Emil Ali

Welcome to the Financial Advisors Want to Know Podcast, I’m Catherine Tindall a CPA with Dominion where our focus is helping financial advisors navigate income tax planning and compliance for their firms. 

Emil J. Ali McCabe & Ali, LLP Emil J. Ali is a partner at McCabe & Ali, LLP where he represents registered investment advisors and broker dealers in complying with SEC, State, and FINRA obligations. He also helps advisors break away from wirehouses and form their own advisory firms, while ensuring compliance with the Broker Protocol, negotiation of promissory notes, and any FINRA arbitrations.

Key Podcast Takeaways: 

Compliance is foundational, not optional. Whether you're starting your own RIA or scaling an existing practice, compliance is a non-negotiable part of running a successful advisory firm. From the outset, firms need to establish internal regulatory structures, including compliance manuals, testing policies, and a named Chief Compliance Officer (CCO).

The "culture of compliance" is key to long-term success. Firms that embrace compliance as part of their operational DNA are better equipped to handle growth and regulatory scrutiny. This involves empowering your CCO (whether internal or external) with the authority and resources needed to enforce policies effectively.

Breaking away from a wirehouse requires careful planning. Many advisors underestimate the compliance responsibilities they take on when leaving a structured environment like a wirehouse. Without proper systems in place, advisors risk falling out of regulatory alignment, even with seemingly small actions like marketing or client communications.

Off-channel communications are a growing compliance risk. Tools like texting, Slack, and Teams can create significant challenges if communications aren't properly archived or monitored. Firms need robust systems to ensure all client interactions are documented and compliant with SEC regulations.

Compliance requirements evolve with firm size and complexity. As firms grow in AUM and headcount, their compliance needs increase as well. Milestones like $500 million or $1 billion in AUM often bring heightened regulatory scrutiny, requiring firms to adapt their policies and infrastructure accordingly.

Connect with Emil:
https://www.linkedin.com/in/emilali/
https://mccabeali.com/

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