The biggest compliance concern at RIA firms is cybersecurity, according to a survey of 454 registered investment advisory firms conducted by the Investment Advisers Association and ACA Compliance Group.
For the fifth year in a row cybersecurity was the No. 1 concern, cited by 81% of survey respondents, followed by advertising (29%) and custody (28%). Issues related to privacy was the fourth major concern.
Regarding cybersecurity, nearly two-thirds of respondents indicated that their firms increased compliance testing in this area over the past year.
Compliance professionals at 454 investment adviser firms of all sizes participated in the survey: 30% at firms managing less than $1 billion, 45% at firms managing $1 billion to $10 billion, and 25% at firms managing more than $10 billion. Two-thirds (64%) of firms reported having 50 or fewer employees, which is consistent with industry data showing that the vast majority of investment advisers are small businesses, IAA said in a release.