Evaluating and Integrating Regulatory Technology in an Advisory Firm Compliance Program

Coulter Strategic Services
Jan 6
10 min read

Regulatory technology (“RegTech”) continues to evolve, and many advisory firms are reassessing how technology can support oversight, documentation, and risk management to help control compliance-related costs without requiring a proportional increase in internal staffing or manual effort. For some firms, manual processes remain workable. For others, increasing regulatory expectations, staffing constraints, and operational complexity are prompting a closer look at whether technology can provide greater structure and consistency.

Firms across the industry are managing heightened expectations regarding the governance and oversight of their compliance programs, along with increased demands for timely production and access to documentation for internal annual reviews and regulatory examinations.

When evaluated thoughtfully, regulatory technology can support a more durable compliance infrastructure that aligns regulatory obligations with broader operational efficiency.

Where Regulatory Technology Can Improve Oversight

A well-designed RegTech platform can centralize and standardize activities that are often fragmented across spreadsheets, shared drives, and email. Common areas where firms see value include:

Tracking and documenting annual review tasks.

Maintaining controlled libraries of policies, procedures, and reference materials.

Assistance in managing version history for compliance manuals, regulatory filings, and marketing materials.

Assigning and monitoring compliance responsibilities across the organization.

Supporting personal trading reviews, gifts and entertainment logs, and political contribution tracking.

Managing attestations for Codes of Ethics and firm policies.

Centralizing marketing review workflows with documented approvals.

Logging and resolving complaints, incidents, and exceptions.

Review of client data and their risk profile, households, objectives, restrictions, and ensuring suitability and meeting of client objectives.

Oversight over fees charged, trade monitoring to identify churn, conflicts of interest, and senior citizen violations.

Monitoring AML and suspicious activities.

Ensuring cybersecurity, data protection, and business continuity within internal and vendor systems and services.

Supporting exam readiness through organized, retrievable evidence.

When used consistently, these systems reduce reliance on ad hoc tracking and allow compliance teams to apply their professional judgment to higher-value oversight activities, including interpreting new regulatory requirements, assessing emerging risks, and developing a deeper understanding of firm activities, rather than being consumed by routine, process-driven administrative functions. A centralized compliance platform can provide the firm with a more comprehensive view of client activity, products, operations, conflicts, and business growth.

Aligning Compliance Infrastructure With Financial Practicality

From an operational perspective, compliance obligations tend to expand in scope without being offset elsewhere. Manual systems often require additional personnel time, duplicative review, or reactive remediation as firms evolve. Regulatory technology can help absorb that growth by introducing repeatable processes, centralized documentation, and more transparent accountability.

Rather than viewing compliance tools as a recurring expense, many firms assess them through the lens of operational leverage. Technology can reduce friction across compliance workflows, lower the risk of missed obligations, and support continuity during staffing changes. Over time, this structure can contribute to more predictable resource allocation and fewer disruptive remediation efforts.

Due Diligence Remains Essential

Not every firm needs a regulatory technology platform, and not every platform will be appropriate for every firm. Selecting a solution requires clarity on the challenges the firm is trying to address and a disciplined review of the provider.

Laxmi Ramanath, Founder and CEO of La Meer Inc., offers the following perspective on how RegTech can help:

“As regulatory expectations around vendor oversight, cybersecurity, and documentation continue to increase, advisory firms need more than spreadsheets and shared folders to manage risk effectively. RegTech can provide structure, consistency, and audit-ready records, but only when firms understand what they are trying to solve and perform proper due diligence on the technology itself. The goal is not automation for its own sake, but defensible oversight.”

The focus should remain on selecting a solution that aligns with the firm’s specific risk profile, operational needs, and compliance framework, with an emphasis on transparency, long-term reliability, and the provider’s ability to support regulatory expectations over time.

Vendor due diligence and ongoing supervision are core regulatory requirements, and firms should ensure they maintain well-documented, consistently applied processes to support these obligations. A Vendor Due Diligence Checklist provided by La Meer is included at the end of this article for reference.

Hadrius is a RegTech provider focused on operationalizing compliance oversight for advisory firms and offers the following perspective:

“From Hadrius’ perspective, the best RegTech investments are the ones that make a compliance program more defensible in practice, not just more automated on paper. As an AI-native compliance technology platform purpose-built for SEC- and FINRA-regulated firms, we see successful adoption start with clarity on outcomes: what must be reviewed, by whom, on what cadence, and what evidence the firm needs to retain to support supervisory judgment. The right technology then converts those obligations into repeatable workflows, capturing approvals, exceptions, escalation, and remediation in a consistent audit trail that can be produced quickly for annual reviews and exams.

A critical element is a human-centric approach to automation. In our view, AI and smart workflows should be used to automate intelligently, reducing noise, prioritizing risk, and accelerating routine work, while keeping compliance fully in control. That means surfacing the highest-risk items, context, and rationale so a human reviewer stays involved where judgment matters most, and the firm can clearly demonstrate oversight, decision-making, and follow-through.

When evaluating platforms, firms should look beyond dashboards and broad “automation” claims and focus on how the system produces policy-to-proof evidence: clear records of what happened, when it happened, who took action, what information was relied upon, and how issues were resolved. And because AI is increasingly embedded across supervision and review workflows, firms should evaluate governance and transparency as carefully as features, how rules are configured, how changes are tracked, and how outputs are documented, so the record remains reliable as the firm evolves and expectations shift.

Finally, adoption should be treated as an operating change, not a software install. The strongest implementations start by mapping real workflows end-to-end, defining ownership and escalation paths, and setting clear expectations for how work gets completed and documented. Just as importantly, they choose technology with strong UI/UX, because if the system isn’t intuitive and built with the end user in mind, adoption stalls, teams quickly revert to the old way of doing things (or invent parallel workarounds), and the investment becomes a sunk cost in both time and budget. The best platforms make it easy for new users to ramp quickly with guided workflows, clear tasking, and minimal training overhead, so compliance activity happens in-system by default. That combination of operational discipline plus human-friendly design is what turns RegTech into durable, day-to-day program lift rather than another tool the team has to chase.”

Thomas Stewart, Co-Founder & CEO, Hadrius:

“As AI becomes more embedded in compliance, the benchmark isn’t ‘more automation’, it’s more defensible oversight. For SEC/FINRA-regulated firms, the question is straightforward: can your technology produce a repeatable, regulator-ready record you trust—what was reviewed, under which policy, with what supporting context, and how exceptions were escalated, remediated, and closed?

The strongest programs use AI to reduce noise and prioritize risk, not to replace judgment. AI should surface the highest-impact items, route them through intelligent workflows, and preserve the decision trail, so compliance stays in control while execution becomes consistent, measurable, and provable. When you can run the program from a single system of record and produce evidence on demand, compliance stops being reactive and becomes an operating advantage: faster decisions, stronger controls, and higher confidence under scrutiny.

That’s why more firms are retiring fragmented legacy stacks and moving to Hadrius. Not to simply “use AI” and check the box, but to run a tighter program, strengthen oversight, and prove it with defensible evidence.”

A Growing and Diverse RegTech Landscape

La Meer and Hadrius are two examples of firms operating in the regulatory technology space. They represent only a portion of a broader and expanding market. New solutions continue to emerge, with varying approaches to workflow design, data management, implementation support, and pricing.

Firms should evaluate multiple providers and consider how each solution aligns with internal processes, staffing models, and risk tolerance to make an informed decision about what will work for the firm over the long term.

Implementation and Ongoing Use

Successful adoption requires more than selecting a platform. Firms should plan for a structured implementation period that includes workflow mapping, document migration, permission configuration, and staff training. Ongoing maintenance is equally important. Tasks must be kept current, documentation updated, and reviews completed within the system to ensure records remain reliable.

For a RegTech system to be effective, it must be embedded into daily workflows, with clearly defined expectations for staff use and accountability, in the same way firms rely on portfolio management, trading, and client relationship systems as part of their core operating infrastructure.

Final Considerations

Regulatory technology can be an effective tool for advisory firms seeking to strengthen governance, improve efficiency, and support sustainable operations while managing the long-term cost and resource demands of compliance. The most successful implementations occur when firms clearly understand why a system is being adopted, commit to consistent use, and integrate it into existing compliance processes.

Whether a firm adopts RegTech or not, the objective remains the same: maintaining an organized, evidence-based compliance program that supports regulatory obligations, operational discipline, and long-term stability.

How Coulter Strategic Services Partners With Advisory Firms on RegTech Considerations

Coulter Strategic Services partners with advisory firms to provide comprehensive compliance program guidance, including support with regulatory technology considerations as firms evaluate or implement solutions, when appropriate and when requested, alongside broader compliance program advisory services. Firms considering changes to their compliance infrastructure or technology stack may contact Coulter Strategic Services to discuss how to evaluate RegTech considerations within the firm’s overall compliance program.

If you found this article helpful, please like and share it to help advisory professionals strengthen their compliance programs.

Coulter Strategic Services provides customized compliance and regulatory consulting designed to meet the specific needs of each investment advisory firm. Services are tailored to the firm’s structure, business model, and regulatory obligations to help maintain an effective and sustainable compliance program aligned with current expectations. Contact us today to discuss your firm’s compliance program needs. Learn more at https://www.coulterstrategicservices.com/

All information provided is for educational purposes and should not be construed as specific advice. The information does not reflect the view of any regulatory body, State or Federal Agency or Association. All efforts have been made to report true and accurate information. However, the information could become materially inaccurate without warning. Not all information from third-party sources can be thoroughly vetted. Coulter Strategic Services and its staff do NOT provide legal opinions or legal recommendations. Nothing in this material shall be considered as legal advice or opinion.

Vendor Due Diligence Checklist Provided by La Meer Inc.

La Meer Inc. provided the following checklist as a practical reference for advisory firms evaluating service providers. Not all items will apply to every firm or solution. The scope and depth of review should be scaled based on the firm’s structure and risk profile.

Some of the key areas Vendor Due diligence should cover:

The Business

Deep subject matter expertise and understanding of the market need and ability to comprehensively address it with production level scalable systems that include security, data privacy and business continuity considerations as primary and fundamental.
Company Organization charts to help and support the customer
Culture of compliance within the firm to make sure regulatory provisions are adhered to.
List of client references using the activities being considered
Volume and types of complaints, including those available from public sources
Public records of any legal or regulatory actions and establish corporate standing, if applicable
Adverse Media reports mentioning the company
Mission statement, service philosophy, and quality initiatives
Geographic footprint information (such as location of offices and operations)
Overview of strategic plans, funding, exit, and/or expansion strategies.

· Employment policies, including background checks and hiring practices

Company website and social media sites

The Financials

• Ownership information

• Professional information of the board of directors’ and executive directors’ backgrounds

• Resource plans (including succession plans if any)

• Funding sources

• Financial statements and auditors’ opinions as available

• Annual reports

• U.S. Securities-related filings, often available from the Securities and Exchange

Commission (if any)

Summary of key personnel and subcontractors (if utilized)
Publicly available market information on competitors and client base

Legal

Charters, articles of incorporation, certificates of good standing, and licenses, such as those recorded with the relevant state
Other relevant public information, such as records related to patents and intellectual property
Lawsuits, settlements, remediation, enforcement actions, fines, and consumer complaints
Form 10-K filing (if any)
Form 10-Q filing (if any)

Regulatory Compliance

Reviewing a company’s risk and compliance processes helps assess its ability to meet legal and regulatory requirements, including privacy, consumer protection, anti-money laundering (“AML”), and other requirements.

Policies, procedures, training, and internal controls pertaining to compliance with legal and regulatory requirements
Proposed contract terms that specify performance of legal and compliance duties
Information regarding customer-facing delivery channels or applications (for example, mail, online, and telephone)
Information on the AML processes where the company offers financial transactions like ACH, wires, etc.
Marketing materials and regulatory disclosures if any
Methods used to monitor, remediate, and respond to customer complaints
Customer complaint records if any

Risk Management and Control Processes

Policies, procedures, and other documentation related to the prospective activity
Policies and procedures related to the internal control environment and overall risk management processes
Information on risk and compliance staffing
Recent results of control reviews and audit reports related to the prospective activity
Issue management policies, procedures, and reports
Schedule of planned control reviews and audits
Self-assessments
Training materials and training schedule
Inventory of key risk, performance, and control indicators
Sample key risk, performance, and control indicator reports
Project plans associated with any planned changes to systems or reporting capabilities
Sample reports to the company’s board of directors

Information Security Program

Completed information security controls assessments
Incident management and response policies
Incident reports with associated post-mortem and remediation activities
Information security policies (for example, access management, data center security, backup management, change management, and anti-malware policies)
Information security and privacy awareness training requirements for staff
Policies addressing relevant safeguarding and privacy laws and regulations
Information technology policies (for example, data protection, including data classification, retention, and disposal)
Completed controls or standards assessments
Business Resilience
Business continuity plans
Disaster recovery plans
Incident response plan
Documented system backup processes
Business continuity, disaster recovery, and incident response test results
Cybersecurity reports and audits
Insurance documents
Service Level Agreements
Proposed service level agreements
Evidence of status meeting existing service level agreements