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Best Practices In Archiving and Records Management

According to the SEC’s Office of Compliance Inspection and Examinations (OCIE), records management is one of the most common pitfalls for RIAs and investment firms. The OCIE observes that many advisors

●      often keep inaccurate and outdated records

●      fail to maintain all required records

●      and neglect to implement consistency in record-keeping practices.


With today’s digital world full of electronic communications, there’s no doubt this challenge continues to be a complicated issue for financial advisory firms.

  What Are The Rules?

 Books and Records are the books, accounts, records, memoranda, correspondence and other documentation or information that firms have to make and preserve in accordance with the federal securities laws, MSRB rules, FINRA rules and all other applicable laws, rules and regulations that govern financial advisors.

 According to SEA Rule 17a-4(b)(4), firms are required to retain originals of all communications received, as well as copies of all communications sent for at least three years. In addition, FINRA rule 4511 requires that certain records be kept for a minimum of six years. This requirement applies to all electronic communications relating to the firm’s business, including emails and instant messages.

 In order to comply with regulations, records must also be easily accessible and properly indexed in case of any audits or stockholder requests. That means storage solutions must offer more than just “keeping” the records.

  Technology Makes Its Mark

 Although modern technology has introduced new challenges in the areas of capture and control of communications, it has also brought innovative solutions that make record-keeping easier than ever. Digital records, cloud storage, and blockchain security are technological innovations we are becoming more and more familiar with. Firms are seeing major benefits by implementing these new advances into their businesses on a daily business. Let’s look at some of these advantages.


Easier Audits

Who doesn’t want an uncomplicated audit experience? Since audits are a required part of your business, they should be planned for so that the process goes smoothly.

 By having your books and records conveniently stored in a cloud-based platform, you are able to quickly retrieve any and all items needed. This is a key function of a robust eDiscovery platform, saving you time and hassles.

 When an auditor requires specific information, you can search for and retrieve it instantly. By removing manual, paper-based operations from the process, you are able to significantly speed up audits and reduce business disruption.

 Improved Security

One of the biggest game-changers in online security has come from blockchain technology. Blockchain is a secure, decentralized ledger that uses “blocks” of embedded authentication placed into an electronic “chain” to protect against modification. Systems leveraging blockchain have records captured, overseen and retrieved with the highest level of security available today.

 Electronic files must be stored in an immutable format which makes them non-rewritable and non-erasable; therefore compliant with industry-wide write once, read many (WORM) requirements. Blockchain validation prohibits tampering of records and ensures they are original and unchanged.

 Automated Workload

Without a doubt, automation is becoming a necessity and expectation for businesses across the globe. By implementing modern technologies that allow workflows to be automated, you will find yourself (and staff) spending valuable time with the more profitable aspects of your business. A huge benefit recognized through automated processes is that you can address compliance issues more effectively and thoroughly.

 A Thorough Approach

 It’s recommended that you take a thorough approach with your archiving strategy.

Best practice is to archive everything possible. This way you have what you need, when you need it, at your fingertips.

 With the ever-changing environment, the electronic communications landscape has never been more complex. However, the better you understand the challenges and solutions that modern technologies bring, the more prepared you’ll be for an audit or to respond to an unforeseen incident.


Want to learn more about how Cobalt Archive can help you with your records management? Contact us today to schedule a demo of how easy your archiving can be!

Written By: James Murray, Cobalt Archive


Today’s BPI Advice: Proper archiving is not only a matter of compliance it is also a matter of protection. We believe having a support structure like Cobalt Archive who understands the specifics of RIA challenges makes a great part of your support team.


Cases studies, testimonials and other information on the website are for illustrative purposes only, and may not reflect the terms of any particular insurance policies nor the coverage of any specific claims.  Box Professional Insurance, LLC makes no representations of any kind regarding coverage or the specifics of any policy or claim.  See your insurance carrier and policy for details on coverage, exclusions and limits.