InvestorCOM: Why Wealth Management Needs RegTech

Site: https://investorcom.com/
Founded: 2010
Clients: Banks, asset managers, insurance companies and investment dealers in the financial services industry.
Value proposition: The provider of regulatory compliance software and communications solutions.
The executive team: David Reeve, CEO
Leo Eikelman, Vice President, Technology
Parham Nasseri, Vice President, Regulatory Strategy
Steve Castrucci, Director of Product Management
Mark Koehler, Security Architect

InvestorCOM is a provider of regulatory compliance software and communications solutions, whose intuitive solutions were developed in response to increasing regulation and the demand for more effective communication and disclosure from the financial services industry. The mission of InvestorCOM is to offer the clients in-depth knowledge and expertise that helps them address their compliance obligations using a suite of innovative products and solutions.

Because of the June 30, Regulation Best Interest deadline in the US approaches David Reeve, CEO of InvestorCOM, explains the benefits of using RegTech solutions in wealth management.

Q: How are RegTech and WealthTech solution providers related? In what ways can these solutions be helpful to each other?

David: The WealthTech industry has matured quite rapidly in the past few years. Through its journey, the value proposition of WealthTech has been elevated and has become clearer for the wealth management profession. For example, WealthTech vendors have automated repeatable, complex tasks such as portfolio rebalancing, performance management and client onboarding. Regulatory technology or RegTech vendors aim to do the very same for repeatable regulatory and compliance functions.

In fact, the business case for RegTech solutions has become stronger as global securities regulators have introduced new policies that elevate the level of scrutiny on wealth management professionals. While WealthTech and RegTech serve different needs of a wealth management firm, leaders will combine both capabilities. Wealth Management firms of tomorrow will dominate by blending automation across their value chain, starting from client onboarding, to point-of-sale disclosure and record-keeping.

Q: What are the advantages of using third-party RegTech solutions like InvestorCOM’s?

David: Over the past several years, the wealth management industry has worked tirelessly to keep up with the flurry of regulatory change. During this period, the theme of embracing digital solutions that address regulatory and compliance pain points has become a growing priority. In this light, wealth management firms have three options: (i) hire more staff to keep up with regulatory requirements manually, (ii) develop tools in-house or, (iii) partner with reputable RegTech providers like InvestorCOM. InvestorCOM has grown to become a leading compliance partner to global wealth leaders including HSBC, TD, Fidelity, RBC, Capital Group and others.  Our corporate focus has been to deliver high value, intuitive solutions that eliminate compliance risk.  This focus has enabled us to build long-term enterprise partnerships with over 50,000 wealth advisors on our platform.

For example, InvestorCOM’s PeerCompareTM solution enables advisors and broker-dealers to readily identify peers and disclose their recommendations based on risk, return and cost criteria (also known as Reasonably Available Alternatives under Reg BI).  Each recommendation may generate a disclosure document for the client and an auditable record for the firm. This solution can be integrated into a firm’s existing wealth management platform in one week.

InvestorCOM’s decision to enter the US market is initially focused on Reg BI and we have a long-term strategy to introduce other market-tested wealth solutions. While recognizing the view that meeting this new regulatory standard will be a “heavy lift” for many firms, we believe our role is to support our partners with technology that eases this effort  by delivering high value, intuitive solutions that eliminate compliance risk.  InvestorCOM’s solutions are both modular and integrated and our clients may wish to leverage one or all three of our Reg BI platform solutions; ShelfMonitorTM, PeerCompareTM and ComplianceExpressTM.

Q: Describe the current RegTech landscape

David: In recent years, the RegTech landscape has rapidly evolved to address increasing regulatory and compliance requirements. Securities regulators around the world have focused on reforms that aim to foster safeguards for investors and standardize advisor conduct.

As the June 30, Regulation Best Interest deadline in the US approaches, implementing technology solutions that assist broker-dealers in making investment recommendations in the best interest of their clients will intensify. Having access to comprehensive compliance solutions, such as InvestorCOM’s, will not only help broker-dealers reduce costs, but increase organizational oversight, and mitigate litigation risks, regulatory penalties, and reputational damage.

Q: What are the main problems & opportunities that can be solved with RegTechs?

David: If viewed broadly, the growing opportunities in RegTech stem from the sheer pace of regulatory change in the wealth management industry. To keep up with the onslaught of regulatory change, firms have sprinted to remain compliant and out of the regulator’s doghouse. This movement has resulted in an exponential growth in the size and budget of compliance departments.

As firms take progressive steps to reduce costs and eliminate manual processes, partnering with RegTech vendors that remove compliance risks and mitigate the litigation and reputational damage of non-compliance has become a priority. A simple example would be InvestorCOM’s ComplianceExpressTM platform which is used by many wealth managers as a point-of-sale disclosure and recordkeeping engine.

Q: What has changed in your industry and your company with the beginning of the coronavirus outbreak?

David: We have observed a clear pattern where advisors, and dealers are rethinking their pre-coronavirus routine of serving clients from their offices.  In a recent conversation with a leader of one of the largest global wealth managers, he shared their plan that only 50% of their wealth team will return to the office – meaning that thousands of their employees will continue to work virtually on a permanent basis. For advisors that previously had a lifestyle that included exhausting commuting, client travel and a schedule packed with inefficient meetings, there is a big appeal to continued remote work.  Clients are adapting and often preferring virtual service that includes zoom meetings and enhanced digital services.  Many in our industry are predicting a permanent shift to remote advice as the “new normal”.

From a regulatory perspective, our industry is facing two very significant new regulations in the coming months.  In the US, Reg BI (Best Interest) is being implemented on June 30, 2020 and in Canada, Client Focused Reforms (CFR) follows in 2021.  Each of these regulations represent the most comprehensive wealth compliance reform in decades and dealer implementations will require a major resource commitment and a significant financial investment.  Layered on top of these challenges is the “new normal” – advisors and compliance teams working remotely for the first time ever.  Both Reg BI and CFR require advisors and dealers to enhance their KYP processes by monitoring their shelf of products and offering comparable or “reasonably available alternative” recommendations to their clients.  Many of our clients have over 10,000 products on their shelves and with up to 2,000 product changes weekly, there is an enormous volume of data to manage.  Combining this challenge with increased disclosure and recordkeeping obligations points you very quickly to the solution – technology.  Layering on what is expected to be a more permanent virtual team environment, we expect the winners will be those wealth managers that adopt digital capabilities across their business.

What of the age-old question – will technology replace humans?  Peter Thiel, one of our generation’s leading tech entrepreneurs and thought leaders answers this question succinctly by predicting that the successful entrepreneurs of the future will seek to empower people with technology rather than replace them.

“People have intentionality – we form plans and make decisions in complicated situations.  We’re less good at making sense of enormous amounts of data.  Computers are exactly the opposite:  they excel at efficient data processing, but they struggle to make basic judgements that would be simple for any human.” 

This quote is more relevant in the wealth industry than most others!  The current coronavirus crisis also reminds us of the importance and value of human relationships in our personal lives and our wealth relationships.

Q: What technologies do you use in your product?

David: InvestorCOM utilizes a hybrid cloud strategy with our products, utilizing Microsoft Azure as our cloud platform, harnessing the benefits of both worlds.  We are able to realize the flexibility, ease, and cost-effectiveness of the cloud model, while allowing for control of sensitive assets in our private infrastructure.  We are utilizing Blazor Web Assembly and SignalR to enable flexibility and efficiencies for our development teams.  Our solutions are underpinned by a microservice architecture and drives our integration architecture with our clients and partners.


Both WealthTech and RegTech industries experience great opportunities nowadays. Having the same mission, they can contribute to each other’s success and help to disrupt the industry by automating compliance routine.


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