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A chief compliance officer (CCO) administers a financial advisory firm’s compliance policies and procedures and helps identify and address regulatory risks. For SEC-registered investment advisors, SEC rules require a designated CCO. The role can include updating policies, reviewing compliance practices, training staff and preparing for examinations. An RIA may assign the role internally or outsource it. Let’s take a closer closer look at the role of a CCO and how they contribute to the health and sustainability of RIA firms.
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CCO Requirements for RIAs
The U.S. Securities and Exchange Commission (SEC) requires each RIA “to designate a chief compliance officer to administer its compliance policies and procedures.” This means that the CCO “should be competent and knowledgeable regarding the Advisers Act and should be empowered with full responsibility and authority to develop and enforce appropriate policies and procedures for the firm.” 1
According to the SEC, the CCO “should have a position of sufficient seniority and authority within the organization to compel others to adhere to the compliance policies and procedures.” So this position can serve both as an enforcer of regulatory compliance and a protector of the firm’s reputation, while also playing an important role in risk management.
You must name your CCO on your firm’s Form ADV. The owner or principal of an RIA may designate themselves as the firm’s CCO, name an internal employee or outsource this role to a third party. The SEC does not require you to choose one option over another, but you must name someone to avoid enforcement actions, which may include fines or censure.
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What Does a Chief Compliance Officer Do?
Chief compliance officers perform several critical duties for RIA firms. Here are some of the core responsibilities of a CCO, and how they can benefit your firm.
Policy Management
RIAs are required to have written compliance policies and procedures that are designed to prevent violations of federal securities law. A CCO can assist with drafting and updating compliance documents to ensure your firm’s plan is efficient, effective and reflects the latest regulatory rule changes.
Form ADV
RIAs generally must file an annual updating amendment to Form ADV and may need to amend it sooner when certain information changes. A chief compliance officer can handle the preparation and submission of Form ADV documents to ensure compliance with SEC rules. That can yield significant time savings for you, as updating this document typically requires a fair amount of data gathering and verification to ensure that all information represented is correct.
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Compliance Testing/Audit Preparation
Once your compliance program is in place, regular testing can ensure that there are no gaps or weak spots that could allow a violation to occur. The SEC routinely examines RIA firms to assess whether they’re in compliance with all applicable rules and laws. A CCO can conduct annual reviews and stress tests or hold mock audits to help you prepare for an on-site evaluation from regulators. Should an issue come up during your exam, your CCO can also act as an intermediary for your firm and handle all communications.
Employee Compliance Training
A CCO can assist with getting your entire team on board with compliance policies and procedures, and educate them on new regulatory changes. You may opt to hold training sessions once per year or every six months, to ensure that all existing team members and new hires are on the same page.
Internal Compliance Monitoring and Reporting
A CCO can also help document compliance issues, maintain required records and determine whether regulatory reporting or disclosure obligations apply.
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Choosing a CCO: Internal vs. Outsourced
If you own your firm, you may choose to handle CCO duties yourself. That could save you the trouble of having to find a strong candidate and navigate the hiring process. Assigning the role to an existing team member or hiring a new one is another option if you’d like to keep compliance responsibilities in-house. Outsourced CCO services may be preferable if you run a larger firm or simply don’t have time to fill this role. Here’s how each one compares.
| Pros | Cons | |
|---|---|---|
| Do It Yourself | No additional overhead costs required You already know how your firm operates Decision-making isn’t contingent on a chain of approval or higher-ups You set the tone for compliance culture | Wearing two hats as both principal/owner and CCO may bring additional regulatory scrutiny Conflicts of interest may arise Filling dual roles may place additional strain on your time You may lack necessary expertise |
| Internal Promotion/New Hire | Current team members may already understand how your firm operates Trust and rapport are already established Internal promotion may be more cost-effective than hiring outside the company Outside hires can bring a fresh perspective and bias-free judgment | Internal hires may face learning curves with regard to regulation They may struggle to manage their time if filling dual roles Outside hires may be a mismatch for your firm’s company culture The cost to bring someone in from the outside may be high |
| Outsourcing | Candidates typically possess deep knowledge of RIA compliance rules They bring an unbiased perspective to the table Outsourcing leaves you free to focus on other areas of your business Cost may be less than paying a full-time employee salary | Personality clashes may make it difficult to work together Implementing compliance culture may be difficult for a third-party Outsourcing does not eliminate regulatory risk Requires handing control over to an outsider |
Cost of Hiring a CCO
The Bureau of Labor Statistics (BLS) puts the median salary for compliance officers at $80,730 per year, as of 2025. 2 However, this figure does not apply specifically to CCOs for RIA firms. Reviewing salary ranges for financial services roles can offer more perspective on how much it may cost to hire a CCO.
According to ZipRecruiter, the average salary for CCOs working with RIAs is $98,949 annually. The salary range is $47,000 to $172,500, with the majority of RIA CCOs earning between $61,500 and $115,000. How much you pay to hire a CCO can depend on your location, the level of experience you’re seeking and whether you opt to bring someone in full-time or part-time. Salary expectations may also differ if you hire someone to work on-site or remotely in an outsourced role. 3
AdvisorLaw LLC estimates the cost of outsourcing at between $2,000 and $4,000 per month for basic services, and $4,000 to $8,000 per month for comprehensive services. You may need the latter if you run a larger firm or your business has more complex compliance needs. Getting quotes from multiple CCO outsourcing companies can help you develop a realistic range for what you might pay. 4
Keep in mind that These figures reflect ongoing compensation or service costs and do not include expenses associated with recruiting, interviewing or training.
Frequently Asked Questions (FAQs)
Do All Financial Advisors Need a CCO?
Registered investment advisors are required to have a chief compliance officer under SEC rules. State-registered advisors may also be expected to have a CCO. A financial planner would not need to meet this requirement unless they’re also registered as an RIA.
What Skills Does an RIA CCO Need?
RIA CCOs should be knowledgeable about federal and state compliance rules and regulations. A bachelor’s degree in finance, accounting, business or a related field is also helpful. Once hired, a CCO will need to learn the way an RIA firm operates and assess its unique compliance risks. Good communication skills and technology skills are valuable additions.
Who Is Liable for RIA CCO Misconduct?
CCOs can face personal liability for their own misconduct or for causing or participating in securities law violations. For example, in July 2025 the SEC settled charges against a former CCO who altered records and created fictitious forms in response to an SEC exam of their employing RIA firm. However, serving as CCO does not automatically make someone personally responsible for every compliance failure at the firm.
Bottom Line
Compliance can help ensure that the firm operates within regulatory boundaries and maintains a high level of trust with its clients. At the helm of this requirement, you’ll find a CCO who is tasked with adhering strictly to regulatory standards, effectively managing risk and fostering a culture of compliance.
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Article Sources
All articles are reviewed and updated by SmartAsset’s fact-checkers for accuracy. Visit our Editorial Policy for more details on our overall journalistic standards.
- “Compliance Programs of Investment Companies and Investment Advisers.” U.S. Securities and Exchange Commission, 5 Feb. 2004, https://www.sec.gov/rules-regulations/2003/12/compliance-programs-investment-companies-investment-advisers.
- Compliance Officers. U.S. Bureau of Labor Statistics, https://www.bls.gov/ooh/business-and-financial/compliance-officers.htm.
- “Ria Compliance Officer.” ZipRecruiter, 19 Sept. 2026, https://www.ziprecruiter.com/Salaries/Ria-Compliance-Officer-Salary.
- Atlas-Quinn, Michelle. “How Much Does It Cost to Set up an RIA Firm?” AdvisorLaw, https://advisorlawllc.com/how-much-does-it-cost-to-set-up-an-ria/.