Minimizing Merger & Acquisition Advisors Compliance Risk

One of the most important events that occurs in the life of a business owner is when they have reached a level of success that allows them to sell their company. This event can be the culmination of decades of hard work and careful planning or a once in a lifetime idea that has manifested into a profitable transaction. Advisors help these business owners navigate through the selling waters while allowing the owners to keep their ship steady throughout the process. These owners are the clients and regulation has been instituted to protect them at every turn. Protecting the client is paramount but how can advisors protect themselves and their practice?

Series 79 Advisors

Most professionals that work in the Mergers and Acquisitions (M&A) industry are aware that we live in an ever changing regulatory environment. Investment Bankers, M&A Advisors, and Private Equity Group professionals have regulatory hurdles whether these individuals are registered with FINRA or not. Being a Series 79 Registered Representative not only can elevate your practice from others in the eyes of potential clients but also facilitate a better understanding of the regulatory environment in which we all work.

While the advisors within a practice are the most visible, it is important to realize that compliance should be an office wide mandate. There are several ways to minimize risk when considering the practice in its entirety. An educated staff is an asset that can work together to help your practice succeed. Office wide meeting agendas should have a section on regulatory changes or a review of important compliance related issues. Keeping this information in the forefront of everyone’s daily work routine will help prevent problems before they have any negative effect on the practice. In addition, it is a good idea to provide dedicated regulatory compliance training. This training can be in the form of webinars found on FINRA’s website or a seminar or conference focused on compliance. Sharing this information company wide can have exponential benefit.

Another practice to engage in is working with others who are experts and focused on the regulatory industry and compliance. Hiring experienced counsel, internal auditors, and a compliance team are all important pieces to the regulatory puzzle. An in house compliance department can be effective but also costly. Associating your staff with a FINRA member firm via registration and licensing allows for dedicated third party compliance teams to offer expertise and a focused unbiased approach to keeping your practice safe – and permitting you to keep your focus on your clients. These firms take extra steps to ensure that your company is functioning at a high level of compliance by reviewing marketing, contracts, website content, as well as conducting branch exams so you can feel confident that you are doing things right.

Operating as an advisor to business owners is an important and necessary line of work. Make sure that you, as the advisor, are practicing in the highly professional manner that is expected. Compliance is not the most exciting part of your role but it is certainly necessary. Protect your reputation and company by operating with an eye on compliance.

Licensing Whitepaper


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