Financial advisors know to expect and prepare for audits, yet these periodic regulatory reviews can still be daunting and invoke fear in advisors. We get it.
Our team is well-equipped to guide you through the entire process and answer the questions you may have but aren’t sure how to ask. We’re in this together — let’s dive in!
Q: Should you be scared of an audit?
A: No, not at all! Audits don’t have to be stressful. We emphasize daily compliance, allowing you to avoid last-minute preparation. Our proactive resources ensure you're well-prepared and confident for every audit.
Q: How often will you get audited? How long does an audit last?
A: Typically, advisors can expect an audit once every three years. If you’re new to Pilot Financial, your first audit can happen at any time following your affiliation, but we will make sure you are prepared from day one. Each audit usually lasts about three to four hours, though some may wrap up even sooner.
Q: How far in advance is an audit scheduled?
A: Most audits are scheduled with at least four weeks’ notice, giving you ample time to prepare. However, if an auditor is trying to get a more accurate picture of a company's regular operations and compliance, an unannounced audit is possible. While rare, it can happen, but being a Pilot advisor means you’re already in a strong compliance position thanks to our ongoing support.
Q: How should you prepare for an audit?
A: As a Pilot advisor, you’re already ahead of the curve when it comes to audit readiness. Still, for scheduled audits, we offer our Pilot Prep Guide with additional tips and information to help you feel extra prepared. This guide is part of our extensive support documentation, available exclusively to Pilot advisors, and it covers everything from document organization to checklist reminders for last-minute prep. You can obtain a copy by reaching out to our office.
Q: What are three common mistakes advisors make, and how can you avoid them?
- Advertising and social media approvals
Make sure all your advertising is approved by LPL Compliance. Then, link your social media accounts, including LinkedIn, Facebook, X, and Instagram, to Social Patrol. This ensures that all your online content is tracked effectively to meet compliance standards. - Device security compliance
If you use your mobile device in your practice, you must comply with LPL’s Branch Office Security Policy This includes setting lock screens to automatically activate within 15 minutes or less, an important compliance measure often overlooked. - Stay up to date with Form CRS recommendations and delivery
At the time of each recommendation you make for a client, you must deliver a two- to four-page Relationship Summary (Form CRS) to new and existing advisory and brokerage customers. To satisfy SEC requirements, you must deliver via email, mail, or by hand and retain delivery documentation. This documentation is crucial for audit success and helps you consistently meet regulatory expectations.
Our commitment to compliance and support makes the audit process smooth and straightforward. Whether you’re preparing for your first audit or you’re a pro at them, our comprehensive resources and day-to-day guidance ensure you have everything you need.
Do you have a question we didn’t cover? Connect with our team — we’re here to support you so you can focus on what matters most — your clients.