It’s no surprise that compliance is a must for RIAs and wealth management firms.
Staying in compliance streamlines operations and helps avoid costly and time-consuming audits and fines. But it also can help build your business in another way: by helping bring in new clients.
In the competitive world of financial planning, compliance can give you an edge over the competition and set your firm on the path to growth in three key areas.
Competitive Advantage of a Strong Reputation
Most clients realize the risk inherent to financial planning and wealth management, but they also want to minimize that risk with an advisor they can trust. A strong reputation is worth its weight in gold and can be a powerful way to attract new clients. Staying in compliance builds your reputation and can bring in new clients because they know you will take care of their accounts and personal information.
When given a choice between an advisor who is known for staying in compliance and one who isn’t, new clients will almost always choose the advisor they can trust. That’s a huge competitive advantage that can set you apart from other firms.
Staying in compliance and building trust does more than just bring in new clients — it encourages existing clients to refer your services to family and friends. Studies found that 94% of investors are likely to make a referral when they “highly trust” their advisor. Referrals are one of the best ways to grow your business, so the impact of a trusted reputation can’t be understated.
Staying in Compliance Provides More Time to Serve Clients
Compliance issues can be draining to a firm and advisor, both financially and time-wise. Even minor compliance issues can cost firms thousands of dollars in fines, plus the time to sort through paperwork, track down documents, and work through the mountain of paperwork brought by incompliance. Larger issues can bring even heavier fines and take longer to resolve — and the cost of compliance is only increasing.
During that time of recovering from compliance issues, firms of all sizes miss out on providing excellent service to clients and building relationships with prospects. Even if non-RIA staff respond to compliance issues, it still becomes a drain on the entire firm’s resources. It’s hard to showcase your firm’s abilities and make sales when you’re tangled in compliance red tape.
On the flip side, having an established and automated system for your files that ensures everything is in compliance provides you peace of mind and gives you more time to build your business by reaching out to clients and building relationships. Instead of being in the weeds of compliance issues, you can look at a big-picture strategy to move your firm forward and gain new business.
Compliance Helps Build Out Desirable Digital Tools
Financial clients increasingly demand digital solutions to track and access their accounts and connect with advisors. Firms that provide strong digital solutions have a considerable advantage over paper-based firms as they demonstrate their forward-focused mindset and leverage the speed and efficiency of using digital tools.
Managing compliance significantly increases your digital tools because digital file storage and organization are already in place. When you use tools like Docupace to automate data storage and streamline back-office tasks with compliance in mind, you also build digital tools for other purposes.
An integrated digital solution does more than just increase compliance — it creates strong digital services across the entire firm, both for clients and employees. Robust internal digital solutions relieve bottlenecks for advisors and allow for faster and more transparent service while ensuring that accounts and documents are in compliance. Robust external digital solutions keep clients in tune with their accounts and empower them to reach their financial goals.
The benefits of compliance go beyond just avoiding costly fines. By creating a digital-first compliance system, you can bring in new business and grow your firm. In today’s competitive market, prioritizing compliance is required to attract new clients.
