Registered investment advisers (“RIAs”) should ensure training is assigned periodically to keep covered persons up to date on industry and product related topics. In planning, developing, and implementing an RIA’s training plan, firms should consider its size, structure, and the scope of its business activities, as well as any regulatory developments. After training is assigned, it is important to follow up to ensure completion by all assigned individuals.

What Should Your Firm’s Training Plan Cover?

Covered job functions at the firm and the persons who perform these functions, including the following:

  • The various roles and responsibilities of each covered registered person, the knowledge required for each covered registered person to perform his or her assigned job functions and the issues such persons should be aware of.
  • The experience of the firm’s personnel, in the industry generally, and with the various products and services offered by the firm.
  • Any reportable events and disciplinary histories of firm personnel, particularly in products or services offered by the firm.

Products and Services

An RIA’s training plan should cover products and services the firm offers its customers. This includes the type of products and services offered to customers and the complexity and risks of particular products or services offered.

Customer Complaints

An RIA’s training plan should also cover customer complaints, litigations, arbitrations, and regulatory actions for the firm or its covered registered persons by product and/or service, including: Gathering and reviewing data for the firm and its personnel in these areas, which may identify patterns in products or services that could warrant training for firm personnel. Firms should consider the recent and long-term trends for the firm in these areas.

For more information on customer complaints, visit the SEC’s Investor Bulletin: Investor Complaints.

Changes to Industry Rules

Employees should be up to date with changes to industry rules, regulations, or related laws, as well as changes to firm policy and/or procedures, including a review of changes to the regulatory landscape, as well as changes to firm policies and procedures, either as a result of regulation changes or for other reasons, to identify training needs.

Internal Input and Feedback

Firms should obtain feedback and evaluations from personnel participating in existing training programs. This feedback, as well as feedback or input on potential training issues from sources such as the firm’s compliance, legal, internal audit, trading, and operations departments, should be evaluated. Input from firm personnel using surveys, interviews, focus groups, etc., regarding perceived training needs is also a valuable tool. These reviews should also include analyses of performance reviews, internal disciplinary actions, and business plans to identify training needs for individuals or groups within the firm.

Identify Specific Training Objectives

Based on the prioritized needs, firms should identify what the objectives for each aspect of the training will be. This should include identifying specific goals, like pass rates (if applicable)) for each objective.

Connect Training Objectives to Personnel

Training objectives may be universal, whereby they are applicable to the entire firm; however, it may be appropriate to develop and implement specific training to certain groups or individuals. Training objectives that are differentiated for each applicable group of covered persons tend to make the impact of the training more meaningful and applicable to each group.

Regulatory Issues

Training should address regulatory reviews, investigations, and disciplinary actions involving the firm and its agents. Broad- based comments or findings by industry regulators, including any suggestions developed and disseminated.

Economic Conditions and Market Environment

An RIA’s training plan should also address the effects of changes in market conditions on products or services.

For more information regarding RIAs, check out some of our other blogs:

If your firm is looking for assistance with developing and implementing a training program, please contact us. MasterCompliance also provides expert consulting, outsourcing, and implementation tools in planning and budgeting your firm’s compliance responsibilities.