Compliance is often expensive and difficult to justify as a full-time position in many RIA firms. As a result, the proportion of advisors farming out the compliance function to a third party has increased 33% over the last year.
We're still mining all the great benchmarking data that Schwab has been doing for years. Turns out that one detail -- the compliance outsourcing stat -- was neglected until fairly recently.
A full 38% of RIA firms now use a third-party compliance officer. Last year, the number was more like 27%.
That's a big change in a year, and the reason for it is obvious: cost.
Schwab reportedly estimates that farming out compliance saved about 26% of the cost of doing the job in-house.