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How Advisors Benefit from Having an In-House Legal and Compliance Team

by HighTower Advisors on October 02, 2019

Having legal support is essential for any kind of business, but in today’s uncertain regulatory landscape, it is especially important for financial advisors to have access to trusted legal professionals who can help them stay on top of the ever-changing rules of the industry.

While many RIAs outsource this service, HighTower advisors have the advantage of an in-house legal and compliance department to provide them with guidance on everything from regulatory and compliance advice to dealing with personnel and client issues.

At the 2019 HighTower Advisor Summit, HighTower General Counsel Tim Woods spoke about how his department gives HighTower advisors a leg up in the current murky regulatory environment.

As the federal government moves to strip regulations, many states are actively moving in the opposite direction and attempting to strengthen regulations. Advisors operating in these states can be caught between a rock and a hard place.

“The current U.S. administration’s approach to regulation is really at odds with what many states are doing right now to implement their own fiduciary rules,” said Woods. “What we have to do is read both sides of the state and federal regulations and reconcile them.”

Woods said that having an in-house legal team devoted to studying new rules and educating advisors on what they should be doing is a good way to prevent costly mistakes.

“The advantage of having in-house counsel is that you have a team that is there all the time,” he said. “Our legal team isn’t coming in blind; they don’t have to quickly learn the details of the firm’s operations, the people and where the holes are. It’s much more efficient. The authorities prefer that advisors have a compliance team embedded in-house with the ability to conduct ongoing surveillance of the firm’s activities, as opposed to consultants who come in just once a quarter.”

Woods said advisors also face legal considerations surrounding cybersecurity. “It is essential that advisors have someone coming up with policies and procedures that allow them to do business, while also protecting the clients’ confidentiality and security,” he said.

From setting up secure client portals to ensuring emails are encrypted, there are several technical boxes to check when running a successful advisory practice.

“Our job is to be proactive,” said Woods. “We need to have the sophistication and experience to do the day-to-day, while also staying in front of regulatory and legal developments. We are the first line of defense in that, and it’s what HighTower advisors rely on.”

To learn more about how HighTower can help advisors face legal hurdles, email advisorsuccess@hightoweradvisors.com.

# Fiduciary Standard General Counsel HighTower Advisor Summit HighTower Advisors In-House Compliance In-House Legal Regulatory Tim Woods

HighTower Advisors is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

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