Renewal Reset Series: Stop Duplicating Compliance Work — Pair Your Renewal Filings With Your Procedure Review | Part 2 of 3
- Corrie Scoby
- 1 day ago
- 4 min read
The 3-Part Renewal Reset Series
This post is the second entry in our Renewal Reset Series. Building on the insights from part one, we show how the data you collect for registration renewals can (and should) do double duty when updating your policies and procedures, helping you streamline your compliance efforts.
This article is part of Three Lumos Consulting’s Renewal Reset resource, which explores how renewal-related decisions can be used to reduce duplication, improve documentation accuracy, and support exam readiness throughout the year.
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Stop Duplicating Compliance Work — Pair Your Renewal Filings With Your Procedure Review
Many advisory firms approach compliance tasks as a series of separate obligations: annual registration renewal, periodic procedure updates and the annual compliance review — each completed independently, often by different people or at different times. The result is predictable: duplicated work, inconsistent conclusions and unnecessary frustration.
In reality, renewal season already requires firms to gather much of the same information needed to review and update their written procedures. The instructions to Form ADV require advisers to amend their filings promptly whenever information becomes inaccurate, and Rule 206(4)-7 requires advisers to review the adequacy and effectiveness of their policies at least annually and to designate a chief compliance officer to administer them[1]. When these processes are intentionally paired, firms can reduce redundancy while improving documentation quality.
Why Separation Creates Inefficiency
Annual renewal forces firms to confirm how the business operates today — not how it operated last year or how it was originally designed to operate. That same understanding is essential when reviewing a procedure manual. If renewal and procedure reviews are handled separately:
Information is collected multiple times. Data gathered for renewal filings must be collected again for procedure updates, leading to inefficiency and the risk of inconsistent data.
Inconsistencies between disclosures and procedures are easier to overlook. Examiners have observed that some advisers failed to conduct annual compliance reviews or did not address the adequacy of their policies and procedures, and that many advisers did not follow their own compliance policies or used outdated, off‑the‑shelf manuals[2].
Procedure updates become reactive rather than intentional. Without a consolidated process, firms update procedures only when issues arise instead of proactively identifying gaps during renewal.
These deficiencies illustrate why separating renewal filings from procedure updates can leave gaps in documentation and supervision.
A Practical Way to Alignment
One effective approach is to review renewal information alongside the procedure manual using a simple comparison framework:
What the renewal filings say: What the firm reports in Form ADV and other renewal documents.
What the procedures say: What the written policies and procedures describe.
What actually happens in practice: How the business operates day to day.
This comparison framework sits at the center of the broader Renewal Reset approach, which focuses on aligning disclosures, documentation, and day-to-day practice before exam issues arise.
Comparing these three columns helps firms quickly identify where procedures need to be updated, disclosures require refinement or operational practices lack formal documentation. Rather than treating discrepancies as problems, firms can view them as guidance — clear indicators of where attention is needed.
Guidance from Regulators
Regulators have consistently emphasized the importance of aligning disclosures, policies and actual practice. OCIE’s 2020 risk alert explains that policies and procedures should be designed to prevent violations from occurring, detect violations that have occurred and promptly correct any violations, and that annual reviews should consider compliance matters from the previous year as well as changes in business activities or regulations[3]. NASAA’s 2021 Coordinated Investment Adviser Exams report recommends that advisers review and revise their Form ADV and disclosure brochures annually and prepare a written compliance and supervisory procedures manual that identifies responsibilities and evidence of compliance[4]. Together, these expectations reinforce the value of pairing renewal and procedure reviews.
The Benefits of Pairing These Tasks
When renewal and procedure reviews happen together, firms often find that:
Documentation becomes clearer and more accurate. Aligning tasks ensures that disclosures and procedures reflect the same facts.
Updates feel purposeful rather than rushed. By gathering information once and using it for both tasks, firms can take the time to thoughtfully consider updates.
The compliance program better reflects the firm’s actual risk profile. A consolidated review naturally incorporates operational realities and emerging risks.
The same information gathered for renewal filings can serve as the foundation for a thoughtful annual compliance review. This approach shifts compliance from a series of disconnected obligations into a cohesive process that supports exam readiness year‑round and helps advisers fulfil their fiduciary duty to provide full and fair disclosure of all material facts[5].
For advisers looking to move away from fragmented compliance tasks, the Renewal Reset resource outlines how renewal season can serve as the foundation for a more cohesive, defensible compliance program.
Up Next: Part 3 – From Filing to Findings — Using Renewal Season to Complete a Meaningful Annual Compliance Review.
In Part 3 of The Renewal Reset Series, we’ll show how firms can take this integrated approach one step further — using renewal season as the foundation for a defensible annual compliance review.
Corrie Scoby
Chief Consultant & Owner, Three Lumos Consulting, LLC
We guide RIAs with clarity, integrity, and partnership—so you can spend less time on compliance and more time serving clients.
Note: This article provides general information and does not constitute advice. Consult your compliance team for guidance specific to your firm.
Sources
[1] 17 CFR § 275.206(4)-7 — Compliance procedures and practices (eCFR)
[2] SEC Risk Alert — The Five Most Frequent Compliance Topics Identified in OCIE Examinations of Investment Advisers (Feb. 7, 2017)
[3] SEC Risk Alert — OCIE Observations: Investment Adviser Compliance Programs (Nov. 19, 2020)
[4] North American Securities Administrators Association (NASAA), 2021 Coordinated Investment Adviser Exams Report
[5] SEC Risk Alert — Observations from Examinations of Investment Advisers: Compliance, Supervision, and Disclosure of Conflicts of Interest (July 23, 2019)
