Wealth Management Compliance

What is Wealth Management?

Wealth management is a comprehensive financial service that is typically offered to high net worth or affluent clients who are looking for a one-stop shop to manage all of their financial needs including investments, estate-planning, retirement-planning, tax advice and more. 

Wealth managers serve as consultants, working closely with their clients to create a strategy that aligns with their needs. As part of this process, they are privy to private financial information, provide financial and market-related advice, and may also receive specific instructions to enact certain transactions (i.e. money transfers, purchase or sale of stocks, etc.).  

Who Oversees Wealth Management Companies?

The financial industry in general, including wealth management companies, are heavily regulated in order to keep the markets running smoothly and to protect investors from fraud. In the United States, wealth management companies fall under the auspices of the SEC as well as the Financial Industry Regulatory Authority (FINRA)


The SEC regulates investment advisors, or firms that provide securities-related advice and manage client portfolios. FINRA is responsible for enforcing the SEC’s rules and it also regulates stockbrokers and other broker-dealers, another category that wealth management firms may fall under.


Among the steps that wealth management companies must take In order to be fully compliant with the regulations set forth by these bodies is the requirement to capture and store all business-related communications between employees and clients.

How Can Wealth Management Companies Ensure Compliance?

Maintaining compliance with the ever-changing and ever-growing rules and regulations can be challenging for even the most organized companies. Wealth management compliance is a huge responsibility, one that is typically beyond the scope of what one employee can handle. 


Whether a company has the resources to dedicate an entire team of staff to compliance or whether they are trying to make do with just one compliance manager, there are a number of tips to keep in mind that can make the compliance process easier. Such tips include:

  • Take Advantage of Technology – it’s virtually impossible to maintain compliance without using technological tools. With platforms that automatically record and store relevant communications, compliance officers can rest assured that no conversations are accidentally being missed. The same tools can easily produce reports on demand removing the need for manual processes and eliminating the risk of human error. With automated tools in place, compliance officers’ time is freed up to focus on investigating and resolving potential breaches quickly.

  • Be Aware of New Apps – new communication apps are popping up all the time, and while some will never grow in popularity, it’s important to be well aware of which apps clients and employees are using. Wealth management firms are held responsible for the actions of their employees and being unaware that employees were using a particular app to communicate with clients is not a valid defense. The compliance officer should conduct regular assessments to determine whether new apps are in use.
  • Prohibition is Ineffective – establishing a policy that prohibits the use of certain third-party or off-channel communication apps is unlikely to be effective (and also may not hold up in court should employees be in violation of this prohibition). In the name of customer experience, most employees will respond to customer messages, regardless of the platform the customer has chosen to use. It’s better to adopt a system that makes it possible to monitor activity across all platforms. 

Click here to book your LeapXpert demo today and make sure your wealth management company is always in full compliance with all regulations