Company: Investment firm
Location: U.S.
Financial Services Sector: Mutual Funds, Investment Advisor, Broker-Dealer Services
Background
Responsible Investing and Operational Growth
This investment firm has pioneered responsible investing since 1984. In addition to managing mutual funds, the firm also owned and operated a transfer agent and a limited-purpose broker-dealer. The broker-dealer was primarily used to underwrite mutual funds and to maintain FINRA licenses for representatives promoting the firm’s proprietary funds.
However, as the firm grew to over $35 billion in assets under management (AUM), broker-dealer operations became increasingly burdensome amid rising compliance and oversight obligations. The firm sought a solution to streamline compliance while maintaining brand identity.
Challenge
Compliance Burden and Strategic Misalignment
The firm faced several operational and strategic challenges as it expanded:
- Non-core operations: Broker-dealer activities were not central to the firm’s long-term strategy, but required significant compliance and operational resources.
- Dual roles: Employees were often tasked with responsibilities across both the investment adviser and broker-dealer entities, which led to unnecessary inefficiencies.
- Brand continuity: The firm wanted to maintain its company name and brand recognition for its distribution activities.
- Regulatory complexity: Increasing regulatory scrutiny made it difficult to manage broker-dealer obligations internally without diverting focus from responsible investing.
Solution
Outsourced Broker-Dealer Operations
The firm engaged ACA Foreside to explore options for outsourcing their broker-dealer operations and compliance. ACA Foreside’s private label broker-dealer service model enabled the firm to preserve their brand, while outsourcing their broker-dealer operational and compliance responsibilities.
- Broker-dealer acquisition: ACA Foreside acquired the firm’s broker-dealer functions, retaining their company name for branding and transitioning operations into its service model.
- Collaborative transition: ACA Foreside’s relationship management and distribution client service teams coordinated the transition over several months, incorporating input on current and future procedures, service levels, office visits, board meeting participation, and training to ensure alignment and stakeholder confidence.
- Operational integration: ACA Foreside assumed responsibility for all broker-dealer functions, including financial operations, dealer agreements, DTCC/NSCC sponsorship, marketing material review, and the licensing and supervision of registered representatives.
Results
Efficiency, Focus, and Brand Continuity
- Strategic refocus: The firm was able to devote its time and attention to their advisory core competency and portfolio management.
- Operational efficiency: Broker-dealer responsibilities were seamlessly integrated into ACA Foreside’s infrastructure, reducing the internal burden.
- Brand preservation: The firm’s name remained intact in distribution, maintaining continuity and market recognition.
- Ongoing support: ACA Foreside continues to support the firm through monthly calls and coordinated service across multiple business units.
Conclusion
Scalable Compliance for Investment Firms
This engagement demonstrates ACA Foreside’s ability to deliver scalable solutions that preserve brand identity for firms seeking to streamline operations. By leveraging ACA Foreside’s broker-dealer platform, the firm successfully exited noncore operations while reinforcing its leadership in responsible investing. In 2024, the relationship expanded as ACA Foreside began supporting the launch of the firm’s first ETFs, underscoring a trusted, long-term partnership.
ACA Foreside: Tailored Compliance Solutions for Investment Firms
At ACA Foreside, we specialize in helping investment firms streamline operations while preserving brand integrity and regulatory compliance.
Ready to achieve similar results? Connect with ACA Foreside to explore compliance solutions tailored to your firm.