Lawyer Monthly Magazine - September 2021 Edition

for instance, it is critical that all new advisers and wealth management firms ensure their advertising efforts conform to the specifics of the applicable advertising and marketing rules, in particular under the Investment Advisers Act of 1940, as amended, and meet the high standards of the fiduciary duty where applicable. While disclosures in fund documents and client agreements are critical, and all must assume that each advertising piece or marketing pitch will land in the regulators’ laps for review, we at CSS often also receive more general questions from advisory start-ups on operational issues as well as the compliance obligations. The SEC’s 73 SEP 2021 | WWW.LAWYER-MONTHLY.COM THOUGHT LEADER - EUGENIE WARNER www.cssregtech.com Eugenie L Warner Compliance Solutions Strategies (CSS) 777 Third Avenue, 10th Floor, New York, NY, 10017 Tel: +1 212-576-1170 | Email: info@cssregtech.com Eugenie L Warner I am a lawyer and working as a Senior Consultant with Compliance Solutions Strategies (“CSS”). CSS is a global company providing innovative, technology-driven solutions and compliance services that allow financial firms to meet regulatory compliance requirements while optimising data, operations, and technology. I have been working with CSS for about ten years; prior to CSS, I was a business litigator. At CSS, I work with numerous registered investment advisers to strategise for and implement compliance programs, and I am a Chief Compliance Officer at a private equity firm. Division of Examinations monitors newly registered firms through examinations that assess a multitude of additional critical topics which implicate operational decision-making, including, for example, on custody and the authority of the chief compliance officer. CSS compliance professionals also help emerging firms digest the great work done by our law firm colleagues, including creation of the fund structures, client agreements and other legal documents, and CSS professionals strategically implement the compliance protocols that complement the legal obligations. How can these new firms avert issues ahead of time and avoid regulatory conflicts? I list here three “To Dos” to get off on the right foot with all obligations. These may sound basic, but the basics are often forgotten when you are suddenly in the fortunate position of having new clients and exciting opportunities. It can get fast-paced before you know it. Number 1: To these new firms: Assess your internal strengths and weaknesses. Many times, start-up firms break away from larger entities or otherwise emerge with a small number of investment professionals, whose strengths may be on the investment side, but not on the operations or compliance side. All parts are critical to the emergence and continued success and stability of the firm. This assessment of internal strengths and weaknesses then lays the groundwork for vendor and software decisions, and the due diligence approach to each. You will need competent vendors that know your business and can provide cost-effective solutions for you now and into the future, and these vendors often should work together on behalf of your emerging entity. Here at CSS, for example, we regularly partner with top tier law firms, AI-enabled solution providers, and other material vendors with international reach to optimize knowledge, operations, and technology. Number 2: Do not forget to be practical. Develop the goals and definitely keep the dreams, but also be practical. Think about what you can develop and maintain in the next six months, in the next year, and in the next five years, because promising too much to clients or developing too far ahead of the risk controls or conflicts of interest disclosures can get you into territory that is too risky – then you are relying on luck instead of your expertise and sound judgment. You do not want to be relying on luck when you are managing third All wealth management and investment advisory firms face regulatory issues at all stages of growth.