The answer depends on the nature of the services that your firm offers, the number of clients for which your firm provides services, and the value of the assets that your firm manages. I offer a complimentary phone consultation during which we will explore which regulators, if any, have jurisdiction over your business.

In addition, the Website of the Securities and Exchange Commission at www.sec.gov provides a wealth of information. If your business is located in the State of New York, also consult the Website maintained by the Attorney General’s Office at http://www.oag.state.ny.us/ and click on “Investor Protection” in the gray Resource Center box. If your business is located in the State of Connecticut, look at the Department of Banking Website at http://www.ct.gov/dob/site/default.asp and click on “Securities Licensing.”

The answer depends on the regulators with which your firm is registered and the activities that you and your personnel conduct. Common licenses needed by state-registered money managers are Series 65 and Series 7.

In July 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the act will amend the Investment Advisers Act of 1940 to require some of the investment advisors that are currently exempt from registration as "private advisors" to register with the Securities and Exchange Commission. Generally, all investment advisors that manage $150 million or more in assets will be required to register with the SEC by July 2011. Investment advisors that manage less than $150 million will need to consider registering with state regulators rather than the SEC.

There is no reason why an existing executive may not serve as Chief Compliance Officer, assuming that he or she has a sufficient working knowledge of the laws and rules that apply to money managers. However, many regulators prefer that the person named as Chief Compliance Officer not also serve a portfolio manager.

The Chief Compliance Officer should always be a senior member of the team who has the power and authority to address compliance issues as they arise. The job demands a particular type of personality: someone with high integrity, attention to detail, and the ability to engender trust and respect in others. In many smaller firms, key personnel already wear a number of operational hats, and as a result compliance issues often fail to receive the attention that they deserve.

I intentionally limit my practice so that my clients work with me and only me. What I enjoy most is the close working relationships that I develop over time with my clients.

Often there is little or no guidance in the laws and rules that regulate money managers. Reaching a correct legal conclusion and evaluating risk requires the training and experience of a seasoned securities lawyer. Although some compliance advisors and consultants have the professional background to advise your firm, others have only limited experience working for a federal or state regulator in an entry-level position. Not surprisingly, these people approach problems as bureaucrats do; they are not trained to manage risk resourcefully. In addition, many compliance people have little or no experience as business owners. They are therefore unable to appreciate the economic impact on your business of their well-intentioned recommendations.

The Global Investment Performance Standards (GIPS) are a collection of rules and recommendations relating to the reporting of investment performance by money managers with respect to the funds and accounts that they manage. Your firm may wish to state that it is GIPS compliant, although many money managers do not. I will help you understand these standards and, if you desire, assist your firm in obtaining verification of its GIPS compliance.

Obtaining high-quality compliance assistance should be one of your first priorities. My goal is to help your firm develop a compliance program that prudently uses your budget while addressing the specific risks that affect your firm. Examples of risks that require careful management are trading allocations and your duty to supervise your employees.

One of the first questions that a regulator will ask during your examination is whether the compliance materials that you use are “off the shelf.” Online companies sell standardized documentation and support it with clerical personnel. Everyone associated with compliance immediately recognizes these generic products. The exam staff will form a first impression of your compliance program based on your written materials, and it’s hard to shake a poor first impression. I’ve seen it happen too many times.

In the current regulatory environment, Internet-based forms are not a credible option. Every firm needs a well-designed and consistently executed compliance system that addresses specific needs. Also bear in mind that I will be physically present to coordinate your exam. The folks who sell “solutions” over the Internet never leave their cubicles.