Working for yourself as an independent financial advisor has its pros and cons. While you can enjoy the freedom that independence brings, you may also feel the pressure of trying to do it all yourself or with a small support team.
Partnering with an Office of Supervisory Jurisdiction (OSJ) is a possible solution, as it can greatly benefit your firm’s efficiency and profitability over time.
Managing compliance oversight can be complex and stressful if compliance is not your core competency. Overseeing the day-to-day tasks associated with compliance may not be the best use of your time. With ever-changing regulations and industry standards, having a reliable partner who can help you navigate the complexities of compliance-related tasks is worth exploring.
This is where an OSJ can play an integral role in your practice by ensuring your financial advisory firm adheres to all relevant rules and regulations. Instead of you being responsible, this is where you can pass that onto the OSJ, who then becomes responsible for keeping updated with all new regulations and passes that information on to you and your team.
This includes enforcing your firm’s written supervisory procedures, reviewing client accounts for accuracy, maintaining records, and reviewing and approving client service agreements.
In this blog post, we’ll explore:
- Understanding Compliance Oversight for Independent Financial Professionals and Agents
- The Role of an OSJ in Compliance Oversight
- Benefits of Partnering with an OSJ for Compliance Services
- Access to a Network of Experienced Compliance Professionals
Are you considering partnering with an OSJ? If so, read our latest Quick Guide, which provides helpful tips.
Understanding Compliance Oversight for Independent Financial Professionals and Agents
Compliance oversight is paramount because it helps protect investors from potential fraud and fosters a fair and transparent marketplace.
Here’s a breakdown of what compliance oversight entails:
- Written Supervisory Procedures (WSPs): Broker/dealers create and enforce WSPs, which are detailed guidelines outlining how financial professionals should manage their operations, handle client accounts, and adhere to regulations. These procedures help mitigate risks and ensure consistency.
- Monitoring Activities: Broker/dealers oversee financial transactions, marketing materials, client communications, and other activities to confirm compliance with regulatory rules, such as those set by FINRA (Financial Industry Regulatory Authority) or the SEC (Securities and Exchange Commission).
- Audits and Inspections: Periodic audits and office inspections are conducted to assess adherence to compliance policies. These reviews identify potential issues and provide recommendations for improvement.
- Recordkeeping and Reporting: Compliance oversight ensures accurate and timely documentation of client transactions, disclosures, and agreements. This is critical for regulatory reporting and protecting clients in case of disputes.
- Training and Updates: Broker/dealers provide ongoing education about regulatory changes and industry trends. They ensure financial professionals understand and implement new rules effectively.
Many independent financial professionals partner with an Office of Supervisory Jurisdiction (OSJ), which serves as their team of compliance officers.
OSJ Supervisory Procedures
The role of an OSJ is integral to maintaining compliance oversight for independent financial professionals, including Investment Adviser Representatives (IARs) and agents.
One key function of an OSJ is to establish and maintain written supervisory procedures (WSPs), which provide a comprehensive framework for monitoring and managing compliance risks.
These procedures cover various aspects of a firm’s operations, including recordkeeping, reporting, disclosure requirements, and guidelines for reviewing and approving marketing materials. OSJ compliance teams work closely with you and your team to implement these procedures, ensuring they are consistently followed and updated in response to changing regulatory requirements.
In addition, the OSJ conducts regular audits and inspections to assess the effectiveness of your firm’s compliance program and identify areas for improvement. This proactive approach to compliance helps you navigate the complex regulatory environment, minimize the risk of violations, and foster a culture of trust and accountability.
Benefits of Partnering with an OSJ for Compliance Services
By partnering with an OSJ to handle compliance-related issues, you can experience many benefits that directly contribute to your business’s growth and sustainability.
One significant advantage of outsourcing your compliance oversight to an OSJ is the ability to focus on your core business activities, such as cultivating new client relationships, servicing current clients, and improving your advice and services.
With the complex and ever-evolving landscape of financial advisor compliance, OSJ compliance teams can provide the necessary expertise to ensure adherence to regulatory requirements. This helps you avoid the costly consequences of non-compliance, such as fines and reputational damage, ultimately allowing you to concentrate on building a successful, profitable business.
Moreover, partnering with an OSJ for compliance oversight can improve operational efficiency and provide your firm with a more robust risk management framework. OSJs are well-versed in developing and maintaining written supervisory procedures, essential for ensuring compliance with industry regulations.
With access to a team of compliance professionals, IARs and agents can leverage the OSJ’s knowledge and experience to identify potential risks and implement adequate controls. This results in a more streamlined approach to compliance and instills confidence among clients, stakeholders, and regulators.
Access to a Network of Experienced Compliance Professionals
Independent financial professionals and agents can significantly benefit from partnering with an OSJ with an experienced compliance team. This OSJ compliance team can provide invaluable guidance and support, helping you and your team navigate the complex regulatory landscape.
By leveraging the expertise of these compliance professionals, you can focus on growing your business and serving your clients while ensuring that you remain compliant with all relevant laws and regulations. A well-established OSJ with a proven track record of compliance can provide a wealth of knowledge and experience.
When selecting the right OSJ for your practice, several factors must be considered, including the OSJ’s expertise and experience, technology platforms and tools, fees and pricing structure, and responsiveness and support.
When evaluating OSJs, be sure to review the fintech solutions they utilize. You want cutting-edge technology to streamline compliance processes and improve efficiency. Additionally, when assessing the OSJ’s fees and pricing structure, ensure that their costs align with your budget and provide exceptional value for the operating expense.
Lastly, analyze the OSJ’s responsiveness and support. A reliable partner should readily address your concerns and provide timely assistance.
Get to Know Evolution Financial Advisors
We are a specialized Large Enterprise/OSJ within the Advisor Group network. Each independent financial advisor we serve is extremely important to us.
Evolution is one of the most prominent OSJs in the AG network that serves independent financial professionals and agents.
A unique team of experienced professionals has fueled our history of accomplishments with years of experience. We would like to talk to you if you’re considering an OSJ partnership for your firm.
