The main compliance concern of investment advisors in the wake of the Covid-19 pandemic is business continuity planning, but most firms had already taken steps to be prepared before the coronavirus crisis erupted, according to a recent survey.
Business continuity planning surpassed cybersecurity as the top compliance topic in 2020, after cybersecurity held the top spot for six years, the Investment Adviser Association says. But 99% of the companies already had a business continuity plan in 2020, according to a survey of 384 firms, 43% of which had regulatory assets under management between $1 billion and $10 billion and 46% of which had between 11 and 50 employees. In addition, 69% of respondents say that their plans included a response to a pandemic before the Covid-19 outbreak, IAA found.
Moreover, 93% of firms that included pandemic planning in their business continuity plans found them to be effective — and among those that didn’t include pandemic-specific plans, 96% nonetheless found their plans to be effective, according to the survey.
On the other hand, 12% of respondents did report a material impact from Covid-19, including on the operations of the firm, employee management, client or investor management and communication, issues with portfolio management and delays in dealing with regulatory obligations, IAA found. Sixty percent of respondents temporarily closed offices and 81% had all employees working from home, according to the survey.
However, none of the respondents reported any privacy breaches, delays in reporting or delivering their Form ADV, or any material cybersecurity events, IAA found.
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