ORION GUIDE

The Ultimate Guide

to Compliance
Responding to Regulatory
Complexity with Greater Ease
Table of Contents
Introduction 03

01 A B R I E F H I S TO RY 04

02 TO P H U R D L E S 06

03 R E GT E C H C O M M O N
CHALLENGES
08

04 COMPLETE COMPLIANCE 10

05 I M P O R TA N T T E C H
C O N S I D E R AT I O N S
14

06 CONCLUSION 16

About Orion 18

The Ultimate Guide to Compliance 2

Introduction

The Ultimate Guide to Compliance: Responding to

Regulatory Complexity with Greater Ease

For financial advisors, the 2007-2008 global financial crisis changed everything.

Advisors were tasked with guiding clients through one of the most devastating
economic catastrophes of the modern era. And after the dust settled, they were met
with increasingly complex and stringent regulatory expectations.

Anyone who lived through that period understands why the regulatory response was
swift and dramatic. These new laws were enacted with good intentions. But they did
also create additional pressures on financial advisors.

Today, every firm — regardless of headcount, budget, or resources — is held to the

same exacting regulatory standards. And the regulators are stepping up their own
tactics for enforcement, embracing technology to help them catch violations and hold
firms and individuals accountable.

Regulatory technology (or RegTech) provides an opportunity for firms to keep pace
with the regulators’ expectations. Instead of leaving compliance to chance, RegTech
empowers all members of a firm — whether they’re part of the compliance team or
not — to take charge of their compliance work. And the centralized nature of the tool
creates a clear paper trail that makes it easy for compliance officers to track efforts,
pull reports, and prove their work to regulators.

Perhaps the greatest benefit of a fully integrated RegTech solution is the impact it can
have on your firm’s culture. When it’s easy for your entire team to integrate compliance
into their daily workflows, you fuel a culture of compliance within your firm.

LET’S DIVE IN 

The Ultimate Guide to Compliance 3

 01
A Brief History of the
Regulatory Landscape

The Ultimate Guide to Compliance 4

R E G U L ATO RY L A N D S CA P E

Increasing Complexity,
Increasing Pressure on CCOs

The regulatory landscape has undergone a sea change in the past 15 years.
The global financial crisis revealed major faultlines in the financial services
industry, and the government stepped in with sweeping legislative changes 715
in an attempt to prevent future cataclysmic financial events. Total SEC enforcement
actions in 2020.¹

Most notably, the Dodd-Frank Act introduced amendments to many existing

rules as well as new guidelines within its 848 pages. And although the 697
Trump administration rolled back certain portions of the Act in 2018, recent Total SEC enforcement
disruptions in the banking sector have brought regulatory issues back into actions in 2021.²
focus for lawmakers and consumers alike.

Even before the recent banking failures, regulatory agencies had maintained
760
Total SEC enforcement
pressure on registered investment firms and advisors. The SEC kept up a
actions in 2022.³
steady cadence of enforcement actions in the most recent years, averaging
out to 724 enforcement actions per year between 2020 and 2022.

And as we all know, enforcement actions come with consequences. In

addition to the reputational damage these actions generate, the SEC ordered
more than $6.4 billion in actions including civil penalties, disgorgement, and
pre-judgment interest in 2022.
$6.439B
Total money ordered in SEC actions,
including civil penalties, disgorgement,
The average SEC penalty amount has risen steeply in recent years — from and pre-judgment interest.³
$2.1 million per standalone case in 2019 to $9.1 million in 2022.

It’s also worth noting that the SEC received a $210 million increase to

$9.1M
its 2023 FY budget, which will finance, in part, an expansion of its
enforcement division.

What does this mean for CCOs? It all amounts to additional pressure to Average SEC penalty for a standalone
create an effective, always-on compliance program. case in 2022.⁴

Share of high net worth (HNW) Investors say personalization is the

and affluent clients who think their third-most important factor in their
The Ultimate Guide to Compliance 5
primary wealth manager should selection of financial advisors.¹
improve their digital capabilities.¹
 02
Top Hurdles for
Compliance Officers

The Ultimate Guide to Compliance 6

 #2
CFOs identify “burdensome
regulation” as the second-
most serious threat their
businesses face.⁶

TO P H U R D L E S

Maintaining a Culture
59%
Percentage of firms with a of Compliance
standalone CCO role.⁷

Despite its vital importance, leaders face significant challenges in keeping their
compliance programs running effectively.

69%
While the number of firms with a dedicated CCO position is on the rise — the
number is over 50% and has been trending upward in recent years — there are still
significant constraints on the compliance team as a whole.
Percentage of IT leaders who
believe budgetary constraints Even in larger organizations, the compliance team cannot and does not do it alone
are limiting the use of vital — RIAs report spending nearly two-thirds of their time on non-client-facing
cybersecurity resources.⁸ tasks, including compliance.⁵

The risks inherent in running an inefficient compliance program are considerable.

When your advisors are focused on compliance, they are leaving revenue on

65% the table. And when your dedicated compliance team lacks the resources and
support to deliver on compliance expectations, you leave your firm vulnerable to
enforcement action.
Percentage of time RIAs spend
on compliance, business, and
staff development.⁵

The Ultimate Guide to Compliance 7

 03
How RegTech Can Address
Common Challenges

The Ultimate Guide to Compliance 8

R E GT E C H

Addressing Common Challenges

RegTech is designed to address many of these prevalent compliance pain points. An end-to-end compliance tech solution
helps you automate key compliance activities, reducing the time burden on your staff and making it easier for you to get
more done with the hours in your day.

Take this example from another highly-regulated space: pharmaceuticals and drug research. The FDA leveraged
automation in its drug application processing workflow and realized the following benefits:

93% 5,200hrs $500K

Percentage reduction in Number of manual labor hours Cost savings realized
application processing time.⁶ reduced by automation.⁶ by implementing new
automated processes.⁶

With an integrated RegTech solution, your entire firm has easy access to key compliance policies, procedures, and tools.
Creating a single compliance environment for your firm gives your compliance team greater oversight into your team’s
compliance actions, and it makes it easier for everyone to access the compliance information and resources they need.

The Ultimate Guide to Compliance 9

 04
Complete Compliance

The Ultimate Guide to Compliance 10

COMPLETE COMPLIANCE

How RegTech Can Support Each

Facet of Your Compliance Program

Compliance is a multifaceted endeavor that touches all sides Here are some of the ways in which compliance
of your business. First, there are compliance expectations for professionals think about using RegTech to support their
individual team members, which encompass standards firm’s compliance.
of conduct and code of ethics expectations.

Then, there are firm-focused compliance matters, including

Employee Oversight
internal audits, tests, and controls, firm-wide policies and
With employee oversight-related compliance concerns,
procedures, governance, and record-keeping.
often the biggest hurdle is ensuring your team is acting
in accordance with policies and procedures. Without an
Finally, there are client-minded compliance issues that
integrated compliance solution, it’s easy for an employee
require ongoing monitoring. Adhering to the SEC’s SCSD
brokerage statement to slip through the cracks, or for gifts
Initiative, pre-trade compliance guidelines, and watching
and entertainment reporting to fall by the wayside.
for events that trigger 13D/G or 13H filing all demand
considerable oversight of ongoing trading activity.
However, when the regulators arrive, they’ll be combing
through your data and expecting to see proof of adequate
These compliance considerations impact each and every
record-keeping. Here are some ways you can leverage
employee and client at your firm. Without a comprehensive,
RegTech to improve your employee oversight.
end-to-end platform to unify your compliance efforts,
your compliance team will struggle to maintain adequate
oversight and nurture a culture of compliance at your firm.

Personal Trading Outside Business Activities

Select a RegTech solution with the ability to Use a forms-based workflow to track, review, and
connect directly with employee brokerage feeds, approve or reject any outside business activities.
allowing for automatic and ongoing monitoring.

Gifts and Entertainment Political Donations

Create an easy-to-access form for your team to Rely on the same forms functionality to manage
report when they give or receive gifts from clients any reporting of political donations. Maintain
or vendors. Streamline the review process, and secure records in your compliance tool.
store records of any disputed or rejected requests.

The Ultimate Guide to Compliance 11

Employee Oversight
When it comes to managing firm oversight, it’s often the scale of the work that is daunting. From regular reviews and
updates to policies and procedures to managing testing and controls to whistleblower and insider trading, the list of
complex tasks is long.

RegTech can help you automate and delegate important firm-focused compliance work, and it can provide your
compliance team with adequate oversight to ensure that all tasks are on track.

Document Library Testing

The right RegTech solution will help you create a Regular testing of your internal controls is
shared library of relevant compliance resources. essential to remaining audit-ready. A RegTech
From your internal policies and procedures to platform can help you assign testing tasks, track
educational material for your team, creating a the status of each item, and address any issues
go-to source for compliance information makes you uncover.
it easier for your team to access and for your
compliance officers to maintain up-to-date
documentation.

Certifications Onboarding
Keeping track of certifications can be Whether you’re onboarding new team members
challenging, particularly when they’re filed or vendors, there must be a process for
throughout the year and by various individuals capturing relevant compliance information.
across your firm. A RegTech solution can A RegTech solution allows you to create a
streamline the process, providing CCOs with workflow for each, with any forms, paperwork,
a centralized library where you can track and educational materials you need.
completion, review certifications, and pull proof
for regulators, when necessary.

Governance and Audit Whistleblower

Effective governance and audit requires Maintaining a safe and secure whistleblower
transparency, collaboration, ongoing attention, program is an essential component of
and meticulous record-keeping. With a RegTech your broader compliance efforts. With a
solution, all of the moving parts of governance comprehensive RegTech solution, your
and audit are managed in one centralized location. colleagues know exactly where to go and what
to do to report any compliance concerns.

The Ultimate Guide to Compliance 12

Client Oversight
In the world of client oversight, scanning through ever-changing reams of data is a major hurdle to maintaining compliance.

Without a RegTech solution, many client oversight-related compliance matters represent a backward-looking view of your
firm’s compliance. If any issues are found, it is in a review of existing trades or data, meaning you have already been in
non-compliance unwittingly.

A RegTech solution allows you to monitor critical information in real-time, so you can catch issues when they arise.
Scanning for lower-cost mutual fund share classes, for example, allows you to identify potentially more appropriate share
class options for your clients and to proactively shift toward those compliant options.

SCSD Alerts 13D, 13G, 13H monitoring

Without a tech solution, scanning for potentially If your firm has large transaction volumes, it’s
less expensive mutual fund share classes is a possible to miss events that would trigger a
tedious, retrospective task. RegTech automates 13D, 13G, or 13H filing requirement. Automated
the process and provides proactive alerts. monitoring and alerts allows you to address
relevant events in real-time.

Client Risk Drift Ranges Pre- and post-trade compliance

Keeping your clients insulated from unnecessary A RegTech solution allows you to automate
risk is a part of your fiduciary duty. However, approvals and rejections for client trade orders
things can change rapidly in times of market based on policies your compliance team has
volatility, and it’s not always easy to spot configured internally. This allows you to catch
relevant risk drifts on your own. RegTech alerts any potential issues, and if a trade warrants
you when clients are out-of-bounds of their closer inspection, your compliance team and
defined risk tolerance range. the advisor can collaborate to assess it on an
individual basis.

The Ultimate Guide to Compliance 13

 05
Important Tech
Considerations

The Ultimate Guide to Risk 14

I M P O R TA N T

Tech Consideration
$4M
Adjusted average total cost of a
When it comes to implementing any new tech solution at your firm, there are data breach across industries.⁹
some critical factors to weigh as part of your decision-making process in
vendor selection.

Does the solution integrate with the rest of your tech stack? Anything
1 less than seamless integration leaves gaps and potential vulnerabilities
— a risk you can’t take with compliance. Look for a solution that fits with

76%
the rest of your tech stack, and find a vendor that commits time and
resources to new customer onboarding and support.

Is the solution secure? IT professionals rank cybersecurity as one of Percentage of respondents

2 the top risks facing their firms today. Particularly in the world of remote that believe remote work will
work, finding a tech solution that provides secure access from anywhere increase the amount of time
and money it takes to identify
is a must.
potential data breaches.⁹

Is the tool easy for my team to access and use? Technology that is
3 confusing, hard to access, or otherwise presents difficulties for your
team is technology that doesn’t get used. Look for a solution with

19%
features like integration, single sign on, an accessible app, and other
features that will encourage your team to use it daily.

Percentage of breaches that

Does the vendor provide ongoing support? One of the biggest hurdles
4 to implementing a new tech solution is the learning curve that comes
were caused by a misconfigured
cloud — making it the leading
with it. Your compliance and IT team will require ongoing support to
source of threats.⁹
configure the system to their needs, and the rest of your firm will require
training in how to use critical features. Working with a supportive vendor
takes some of the pressure off of your internal teams.

70% 60% 46%

Advisors report that, on average, Percentage of those same advisors Share of advisors who say
they’re only using this percentage that identify time as one of the that lack of training is one of
of their firm’s tech stack.¹⁰ biggest barriers to improving their the top constraints on their
tech stack utilization.¹⁰ tech stack utilization.¹⁰

The Ultimate Guide to Compliance 15

 06
Conclusion

The Ultimate Guide to Risk 16

CONCLUSION

Take Control of Your

Compliance with RegTech

It’s true that the regulatory landscape is growing more When you can find and implement the right RegTech
complex and expectations are sky-high. The good news, solution at your firm, you not only reduce pressures on your
however, is that technological solutions are advancing to CCO and leadership team, but you also empower all of your
meet the moment. colleagues to become more deeply invested in compliance.
Allowing each team member to take ownership of their
Innovative RegTech solutions exist to help firms of all compliance work helps to nurture a culture of compliance
shapes and sizes to take control of their compliance, — one in which everyone contributes to this vital work.
automate key processes, manage record-keeping, and
stay ahead of risks.

Sources
¹ SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2020, U.S. Securities and Exchange Commission, 2020.

² SEC Announces Enforcement Results for FY 2021, U.S. Securities and Exchange Commission, 2021.

³ SEC Announces Enforcement Results for FY22, U.S. Securities and Exchange Commission, 2022.

⁴ SEC Enforcement Record Stems From More Penalties, Not More Cases, Bloomberg, 2023.

⁵ Advice firms only spend 35% of time on client meetings, FTAdviser, 2023.

⁶ The regulator’s new toolkit: Technologies and tactics for tomorrow’s regulator, Deloitte, 2021.

⁷ CCOs face an increasing challenge: how to cope with rising regulation?, Deloitte, 2023.

⁸ 51% of organisations lack sufficient budget for cybersecurity needs – survey finds, Fintech Global, 2023.

⁹ Cost of a Data Breach Report, Capita, 2020.

¹⁰ Orion Advisor WealthTech Survey, 2023. respect to the results to be obtained from its use.

The Ultimate Guide to Compliance 17

 About Orion
Orion is a premier provider of the tech-enabled fiduciary process that transforms the
advisor-client relationship by enabling financial advisors to Prospect, Plan, Invest, and
Achieve within a single, connected, technology-driven experience. Combined, our brand
entities, Orion Advisor Tech, Orion Portfolio Solutions, Brinker Capital Investments, Redtail
Technology, and Orion OCIO create a complete offering that empowers firms to attract
new clients seamlessly, connect goals more meaningfully to investment strategies
and outcomes, and ultimately track progress toward each investor’s unique definition
of financial success. Supporting millions of technology accounts and thousands of
independent advisory firms, Orion is the platform of choice for all growth-focused advisory
firms looking to strengthen their client relationships, gain a competitive edge in a crowded
marketplace, and build strong, profitable businesses.

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