Why RIAs Need Industry-Specific Managed Service Providers for Cybersecurity and Compliance
How Domain Expertise, Regulatory Readiness, and Proactive Partnership Define the Next Generation of Technology Support for Wealth Management Firms
Executive Summary
Registered investment advisors (RIAs) and wealth management firms operate in one of the most complex regulatory and technological environments in business. Every communication, data flow, and client interaction is subject to SEC and state oversight and examinations, and stringent fiduciary expectations.
Yet most firms continue to rely on generic managed service providers (MSPs) who are IT vendors designed for broad small-to-medium businesses, not for the compliance-intensive world of fiduciary financial advice. These providers can maintain networks, provide basic cyber security protection and fix hardware, but they often lack the regulatory knowledge, audit preparedness, and workflow understanding that advisory firms require.
This white paper explores why advisory firms must transition from generic to wealth management–specific MSPs, outlining how domain specialization reduces compliance risk, enhances efficiency, and strengthens audit readiness. Drawing on insights from Charles Black, Managing Director and Head of Compliance Services at Joot, this paper examines how firms can close the gap between technical support and regulatory accountability.
The Growing Gap Between Technology and Regulation
The wealth management industry is awash in new technologies, from portfolio management and CRM systems to communication and archiving platforms. But the more integrated the tech stack becomes, the greater the compliance complexity.
Generic IT providers typically manage technology as a collection of independent systems. In contrast, regulators view those same systems as components of a single, accountable compliance framework.
According to Charles Black, “Most firms face similar issues when it comes to cybersecurity and compliance. That’s actually a good thing, it means that a technology partner who’s seen those problems before can apply tested, repeatable solutions.”
The issue, he explains, is that most generic MSPs have not seen those problems before. Their experience lies in commercial environments, not fiduciary ones. They can secure data, but not necessarily in a way that satisfies SEC requirements or industry recordkeeping standards, with the result of a widening gap between what firms believe their IT partners are handling and what regulators actually expect.
Regulatory Realities That Generic MSPs Miss
Books and Records Compliance
Every RIA is required to maintain books and records, including emails and other electronic business communications, for prescribed periods. Generic MSPs often set automated retention or deletion policies appropriate for other industries but in direct conflict with these requirements. “A general MSP might configure email to auto-delete after 90 days,” says Black. “That’s fine for most businesses, but for an RIA it’s a serious violation.”
Custodian and Vendor Assessments
Major custodians, such as Schwab, Fidelity, and Pershing, require detailed cybersecurity assessments, sometimes exceeding 50 items, covering encryption, endpoint protection, and data governance. Generic MSPs rarely know how to complete or substantiate these assessments, leaving advisory firms scrambling to interpret technical requirements into custodial and compliance language.
Audit Preparedness
During regulatory examinations, regulators often request detailed evidence of cybersecurity oversight, such as patch schedules, MFA enforcement logs, encryption policies, and incident-response documentation. A general IT provider can fix a broken laptop; a domain-specific MSP ensures that the firm’s entire environment withstands regulatory scrutiny before the audit begins.
“You can’t wait until regulators come calling to find out whether your systems comply,” Black explains. “Industry-specific providers understand what the SEC is looking for and ensure those controls are in place ahead of time.”
Cyber Governance and Oversight
RIAs should assign key personnel to oversee cybersecurity. Domain-specific MSPs address this directly through recurring review meetings, documented reports, and leadership collaboration. Generic MSPs often treat this as an optional add-on, but in the wealth management industry, it’s an expectation.
You can’t wait until regulators come calling to find out whether your systems comply. Industry-specific providers understand what the SEC is looking for and ensure those controls are in place ahead of time.
Charles Black
Managing Director & Head of Compliance Services, Joot
The Hidden Costs of Using a Generic MSP
When a firm engages a non-specialized IT provider, three common outcomes emerge:
- Compliance Blind Spots: Security practices may appear sound technically, yet fail to align with regulatory standards.
- Audit Vulnerability: Documentation gaps emerge during regulatory exams, resulting in deficiency letters or worse, enforcement actions that can include fines and other severe repercussions.
- Operational Inefficiency: Advisors waste time translating compliance needs into IT language, or managing two disconnected vendors (one for IT, one for compliance).
Black has witnessed this cycle repeatedly: “We’ve seen firms get deficiencies in exams for not archiving email long enough, not because they were careless, but because their IT partner didn’t understand the rules.” The costs are not only financial but reputational. A single cyber-related deficiency can raise red flags for clients and regulators alike, undermining years of trust.
What Industry-Specific MSPs Do Differently
Wealth management–specific MSPs are purpose-built around the unique technology stack and regulatory frameworks of RIAs and broker-dealers. Their differentiators include:
Deep Familiarity with Advisory Tech Ecosystems
Specialized providers are fluent in the tools that drive advisory operations, such as custodial platforms, CRMs, portfolio systems, and compliance software. This allows them to diagnose issues faster and anticipate compatibility challenges before they disrupt workflows.
“Over time and through direct experience, these providers become very familiar with the technologies advisors rely upon,” says Black. “That’s what allows them to move quickly when something breaks or when regulation changes.”
Embedded Regulatory Alignment
Unlike generic vendors who “retrofit” compliance later, industry-specific MSPs design systems to exceed SEC and custodian requirements from day one. They continually update configurations as new guidance emerges, drawing on in-house expertise, industry surveys and compliance partnerships.
Proactive Review Cadence
Many specialized MSPs conduct monthly or quarterly cybersecurity reviews, which are a structured, documented process that satisfies the SEC’s expectation for ongoing oversight. These reviews verify patch management, access controls, backup integrity, and incident-response readiness.
Curated Partnerships and Integrations
Because they serve a concentrated client base, wealth-specific MSPs can vet and recommend compliant technology partners. Charles Black points to the efficiency gains this provides: “When a trusted provider has already researched and tested solutions for archiving or communication capture, advisors save hours of demos and due diligence. They know the solution works and complies.”
Strategic Benefits of a Domain-Specific MSP
Beyond compliance, specialized MSPs deliver tangible business benefits:
- Audit Confidence: Firms enter exams knowing their systems, logs, and documentation are pre-aligned with regulatory expectations.
- Operational Efficiency: Reduced rework and faster service thanks to repeatable industry-specific processes.
- Risk Reduction: Fewer gaps in security and supervision, protecting both data and reputation.
- Technology Scalability: Configurations that grow with the firm, built around integration-friendly architecture.
- Peace of Mind: Confidence that IT isn’t just functional, it’s compliant.
In short, wealth-specific MSPs turn technology management into a strategic compliance advantage.
Conclusion: Specialization is the New Standard
The RIA model is built on trust, the trust between advisor and client, and trust between firm and regulator. That trust extends to technology. A wealth-management-specific MSP isn’t just an IT partner; it’s a compliance safeguard and an operational accelerant. Generic providers may suffice for general business, but in a regulated, fiduciary environment, “good enough” is not enough.
As Charles Black puts it, “The right provider protects your data and your reputation.”
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