A Practitioner’s Perspective

Why Compliance Breaks Down as Firms Grow

For growing investment advisers and private fund managers, compliance breaks down when it remains informal, reactive, or dependent on a few overloaded internal stakeholders. As firms add products, strategies, investors, and regulatory obligations, they need a structured compliance program that can scale with the business and stand up to SEC scrutiny.

As a Director at ACA, I work with firms through ACA’s outsourced chief compliance officer, or OCCO, model to help turn regulatory expectations into practical governance, testing, training, documentation, and business decision-making. In that work, I often see the same issue: the firm has the right intentions, but not the operating structure to turn compliance expectations into repeatable practice.

The model is most effective when it connects regulatory requirements to governance, testing, training, documentation, and business decision-making.

Common Challenges

Across organizations of all sizes, the same issues consistently emerge:

• Compliance operates reactively instead of proactively
• Policies exist but are not operationalized or tested
• Ownership is unclear, leading to accountability gaps
• Leadership lacks independent, objective compliance insight
• Firms feel unprepared for SEC exams and shifting priorities

Having served as a COO, I understand how these challenges increase risk, slow growth, and strain internal resources.

How an OCCO Model Builds a Scalable Compliance Program

1. Establish a risk-based foundation

• Conduct comprehensive risk assessments
• Align compliance priorities with strategy, products, and investor base

2. Build a scalable, operational program

• Design practical, scalable policies
• Integrate compliance into daily workflows and controls

3. Implement ongoing oversight

• Establish monitoring, testing, and governance frameworks
• Ensure regulatory filings and obligations remain on track

4. Drive continuous improvement

• Perform annual reviews and targeted enhancements
• Deliver tailored training to strengthen firm-wide accountability

The goal is not to add more process for its own sake. It is to create a compliance program that is practical, defensible, and scalable as the firm grows.

What Makes an OCCO Model Effective

My methodology is grounded in real-world execution:

• Operational perspective: Compliance aligned with business operations
• Exams focus: Programs designed to withstand SEC scrutiny
• Independent perspective: Objective, unbiased guidance
• Scalable model: Built to evolve alongside firm growth

What Outcomes Can Firms Expect From an OCCO Model?

A well-executed OCCO model delivers measurable impact:

• Stronger infrastructure: Centralized, structured compliance replacing fragmented processes
• Proactive risk management: Identifying and mitigating risks before they surface in exams or audits
• Improved governance: Clear ownership, accountability, and oversight
• Enhanced exam readiness: Alignment with current SEC expectations and priorities
• Operational efficiency: Leadership can focus on growth while compliance runs as a disciplined function