RIASURE Risk Survey 2025

In our continued effort to partner with the RIA community by identifying and mitigating exposures, Golsan Scruggs is conducting our seventh bi-annual RIASURE Risk Survey submitted to registered investment advisory firms throughout the United States.

What do you view as the chief risks to your RIA firm? Please take a moment to participate in our industry survey by ranking the ten areas of risk/exposure in order of your concern from lowest (1 being lowest) to highest (10 being highest). One ranking number must be represented for each risk. A complimentary report of survey results will be provided to all contributors.

Definitions are provided below to better understand each risk.

RISK DEFINITIONS

Trade Execution/Error – Failure or alleged failure to execute a securities trade-transaction as intended or preferred.

Regulatory Compliance/Audit – Failure and/or alleged failure to meet regulatory requirements of the SEC, DOL & various State Regulators.

Conflicts of Interest – Placing or alleged to have placed your interest above the clients’.

Adherence to “Best Execution” (Trading) – Inability or alleged breach of obligation to execute transactions in such a manner that the clients’ total cost or proceeds in each transaction is the most favorable under the circumstances; failure or alleged failure to exercise reasonable care to obtain the most advantageous terms for your customer/client.

Suitability of Investments – Breach or alleged breach of the fiduciary duty owed to your client to determine, provide and transact investment management concurrent and suitable to the client’s financial situation, investment objectives and risk tolerance.

Relationships to Third-Party Professionals – Liabilities imputed upon the advisor for the actions of a third-party relationship (ex: sub-advisor, tax and/or estate consultant, independent contractors, outside portfolio/investment managers, etc.).

Cyber/Privacy Data Breach – Clients’ private information obtained and abused by third parties or employees.

Investment Research/Due Diligence – As a fiduciary, it is the duty of an RIA to recommend and advise clients in a nature that puts the clients’ interests first and that is best for the client. This is the highest standard of care and applies directly to the research and due diligence required prior to investment recommendations.

Fraud (Wire Fraud/Crime/Social Engineering) – Theft by RIA employees of RIA in-house assets or from client accounts. Various schemes using hacking, identity theft, and confidence tactics to defraud you or your clients of their funds.

AI Application Error – AI is a new frontier of risk and much of this risk is unidentified.  Issues of data accuracy, lack of data training, application failure, tampering, deep fakes, technology crashes and improper calibration open a broad range of new risks to advisory firms.