Outsourcing Compliance? 38% Of All RIA Firms Are Doing Just That

Tuesday, December 20, 2011 14:41
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Outsourcing Compliance? 38% Of All RIA Firms Are Doing Just That

Tags: compliance

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.

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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.

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