Complete our questionnaire to determine if your firm requires an annual Surprise Exam.

HLB Gross Collins, P.C. has extensive experience working with RIAs to address the compliance and operational issues facing them.  We are fully committed to continuing education and understanding the ever-changing regulatory environment. We welcome the opportunity to safeguard your firm by incorporating new policies and procedures, which include complying with the new Amended Custody Rule by conducting an annual Surprise Exam.

Our RIA Surprise Exam program and expertise is unmatched, enabling us to lead the industry by implementing innovative approaches to current and emerging issues.  Our well-trained team has acquired exclusive knowledge and insight into these new guidelines, allowing our clients to be proactive, rather than reactive, when they address emerging compliance issues.  We are dedicated to maintaining a comprehensive understanding of all such rising issues, solidifying our unique position to assist RIAs.  Additionally, our exceptional involvement with policymakers and professional organizations allows us to conduct the required Surprise Exam with maximum efficiency and minimal disruption to business operations.

HLB Gross Collins, P.C. is registered with the SEC to provide audit and assurance services to publicly traded organizations.  Our professional team has the training and skill set necessary to support clients and their efforts to comply with the SEC. 

HLB Gross Collins, P.C. is the premier firm providing RIA Surprise Exams and we are ready to assist you.

About The Annual RIA Surprise Exam

On December 30, 2009 the SEC published the final rule changes to custody and record-keeping requirements under the Investment Advisers Act of 1940.  The amended Custody Rule (with limited exemptions) requires advisers with custody of client assets to undergo a surprise examination of those client assets by an independent public accountant.  Advisers who have custody through trustee or executor relationships are not provided with an exemption.  The amendments are designed to provide additional safeguards for client assets when an RIA has custody of client funds or securities.  These changes will significantly impact the custody practices of many private investment funds and their managers, requiring an annual surprise exam, or audit, by a certified public accountant.

Custody Definition

The amended Custody Rule revises the definition of custody to specifically state that advisers have custody if a related person of the adviser holds, directly or indirectly, client funds or securities, or has the authority to obtain possession of them, in connection with advisory services provided by the adviser.  Still, most RIAs do not maintain physical custody of client assets.  However, if any of the following criteria are met for a particular client, then the RIA is considered to have custody and is required to have a surprise exam:

• Direct possession of client funds or securities
• Any arrangement, such as power of attorney, trustee, executor or fiduciary, in which the RIA is authorized or permitted to withdraw client funds or securities.
• Any capacity that gives the RIA legal ownership of or access to client funds or securities (Trustees, Executors, etc.)