Single logo

Investment Advisory Compliance Audit Checklist

A comprehensive checklist for auditing compliance practices within investment advisory firms, focusing on regulatory adherence, fiduciary responsibilities, and client protection measures.

Investment Advisory Compliance Audit Checklist
by: audit-now
4.6

Get Template

About This Checklist

In the highly regulated financial services industry, ensuring compliance within investment advisory practices is paramount. This Investment Advisory Compliance Audit Checklist is designed to help firms navigate the complex landscape of regulatory requirements, fiduciary responsibilities, and client protection measures. By systematically evaluating key areas of compliance, investment advisory firms can mitigate risks, enhance their operational integrity, and maintain the trust of their clients. This comprehensive checklist serves as a vital tool for identifying potential compliance gaps, implementing best practices, and staying ahead of regulatory scrutiny in the ever-evolving investment advisory sector.

Learn more

Industry

Financial Services

Standard

SEC Investment Advisers Act of 1940, FINRA regulations

Workspaces

Trading floors

Occupations

Compliance Officer
Investment Advisor
Legal Counsel
Risk Manager
Chief Financial Officer

Investment Advisory Compliance Checks

(0 / 5)

1
Summarize the findings of the last compliance program review.

Provide a summary of the compliance program review findings.

To understand the effectiveness and areas for improvement in the compliance program.
Write something awesome...
2
Does the firm have measures in place to protect client data?

Indicate whether client protection measures are implemented.

To confirm that client information is adequately protected.
3
What is the current status of the firm's risk management practices?

Select the level of effectiveness of the risk management practices.

To assess the effectiveness of risk management strategies.
4
Describe how the firm ensures fiduciary responsibility to clients.

Provide details on processes and policies in place to uphold fiduciary duty.

To evaluate the firm's commitment to acting in clients' best interests.
5
Is the investment advisory firm compliant with SEC regulations?

Select 'Compliant' if the firm meets SEC regulations, otherwise select 'Non-Compliant'.

To ensure adherence to legal requirements and regulations.
6
How often are investment advisory policies reviewed and updated?

Select the frequency of policy reviews.

To ensure that policies remain relevant and effective over time.
7
Describe the mechanism for gathering client feedback on services.

Provide details on the feedback mechanism used.

To assess how the firm collects and utilizes client feedback for improvements.
8
When was the last compliance audit conducted?

Select the date of the last compliance audit.

To track the recency of compliance audits and ensure timely reviews.
9
How frequently is regulatory compliance training conducted for staff?

Select the frequency of compliance training sessions.

To ensure that staff are regularly updated on compliance matters.
10
What is the average risk rating for client investments?

Rate the average investment risk on a scale from 1 (Very Poor) to 5 (Excellent).

To evaluate the overall risk profile of client investments.
Min: 1
Target: 3
Max: 5
11
What measures are in place to assess the effectiveness of the compliance program?

Describe the measures used to assess compliance program effectiveness.

To understand how the firm evaluates its compliance program and identifies improvements.
12
How often are internal audits conducted on operations?

Select the frequency of internal audits.

To evaluate the firm's commitment to ongoing compliance and operational integrity.
13
What is the average time taken to resolve compliance-related issues?

Enter the average time in days taken to resolve compliance issues.

To measure the efficiency of compliance issue resolution processes.
Min: 1
Target: 30
Max: 365
14
Outline the procedures for reporting compliance incidents.

Provide a detailed description of the incident reporting procedures.

To understand how compliance incidents are managed and reported.
Write something awesome...
15
Is there a clear segregation of duties in critical investment processes?

Indicate whether segregation of duties is implemented in investment processes.

To prevent conflicts of interest and ensure accountability.
16
What tools are used for managing client relationships?

Select the primary tools used for client relationship management.

To evaluate the effectiveness of tools that facilitate client relationship management.
17
Describe the strategy for communicating with clients.

Provide details on the methods and frequency of client communication.

To understand how the firm maintains effective communication with clients.
Write something awesome...
18
Is there a structured client onboarding process in place?

Indicate whether a structured client onboarding process exists.

To ensure that new clients are effectively integrated into the firm's services.
19
What is the average time taken to respond to client inquiries?

Enter the average response time in hours.

To evaluate the firm's responsiveness to client needs and concerns.
Min: 1
Target: 24
Max: 168
20
How frequently does the firm conduct client satisfaction surveys?

Select how often client satisfaction surveys are conducted.

To assess the firm's commitment to understanding and improving client satisfaction.
21
What recent updates have been made to the compliance program?

List any recent updates or changes to the compliance program.

To ensure that the compliance program remains current and effective.
22
Describe the compliance training program for employees.

Provide a detailed description of the compliance training program.

To understand the training provided to employees regarding compliance matters.
Write something awesome...
23
How often are compliance reviews conducted?

Select the frequency of compliance reviews.

To evaluate the regularity of compliance assessments within the firm.
24
What is the average time taken to resolve compliance issues?

Enter the average resolution time in days.

To assess the efficiency of the compliance issue resolution process.
Min: 1
Target: 15
Max: 365
25
Is there an ongoing compliance monitoring program in place?

Indicate whether an ongoing compliance monitoring program exists.

To ensure that compliance is continuously monitored and maintained.

FAQs

Investment advisory firms should conduct comprehensive compliance audits at least annually. However, more frequent reviews of high-risk areas or in response to significant regulatory changes may be necessary.

Key areas typically include registration and licensing, client agreements, fee structures, marketing materials, conflict of interest disclosures, custody of client assets, recordkeeping practices, and cybersecurity measures.

The audit should involve the firm's Chief Compliance Officer, legal counsel, key management personnel, and potentially external compliance consultants or auditors for an independent perspective.

Firms should develop a detailed action plan for each identified issue, assigning responsibilities and deadlines for remediation. Regular follow-up meetings should be held to track progress and ensure timely resolution of compliance gaps.

Technology plays a crucial role in modern compliance audits, including automated compliance monitoring systems, data analytics for detecting anomalies, and secure document management systems for maintaining required records and demonstrating compliance efforts.

Benefits

Ensures adherence to SEC regulations and fiduciary standards

Helps identify and address potential compliance vulnerabilities

Enhances client trust through demonstrated commitment to regulatory compliance

Reduces the risk of regulatory fines and reputational damage

Provides a structured approach to maintaining and improving compliance programs