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ComplySci Acquires RIA in a Box

ComplySci's deal for the compliance technology provider comes on the heels of a $120 million venture capital injection to fuel acquisitions.

Consolidation in the normally staid compliance and compliance technology sector continues with ComplySci's announcement it has acquired RIA in a Box.

ComplySci is better known in financial sectors beyond the independent channel, including the institutional and hedge fund arenas for its sophisticated employee monitoring and compliance technology.

Specifically, ComplySci’s offerings to date have focused on helping firms identify, monitor, manage and report on conflicts of interest arising from employee activities, whether identifying issues with personal trading, acceptance of gifts or entertainment, as well as tracking political contributions and outside business affiliations, and other potential code of ethics violations.

Terms of the RIA in a Box acquisition were not disclosed, but its founder and CEO Will Bressman will serve as president of the combined companies, which will include more than 300 employees spread throughout the U.S. and with an office in the United Kingdom as well.

In an interview, Bressman and ComplySci CEO Amy Kadomatsu said that with the addition of RIA in a Box’s 2,600 customer firms, the combined organization would have 7,000 customers in total.

The two said that their combined teams and similar culture would help them scale and accelerate innovation and their growth strategy. This includes providing software, service, data and consulting to a wide range of firms that include hedge funds and private equity firms, as well as independent broker/dealers, registered investment advisors and other wealth management firms.

They also reiterated that RIA in a Box will continue to operate under its own brand and customers will continue to use the MyRIACompliance platform and receive support from existing team members.

RIA in a Box announced a stand-alone and bundled version of a cybersecurity training and attack simulation platform, designed specifically for RIAs, in 2019 and acquired Itegria LLC, which provides cloud-based virtual desktop solutions for RIAs through its AdvisorCloud offering, in May. RIA in a Box also introduced an automated Form CRS generation tool in 2020, which pulls from a firm’s Form ADV and a short, rules-based questionnaire.

Asked about immediate objectives on its combined road map, Bressman responded the firm would push ahead with enhancements to core compliance offerings.

"An area we immediately plan to work on is taking to market the combined expertise of NRS and our continuing education offering," he said.

The acquisition of RIA in a Box is the third in the fourth quarter alone for ComplySci, which recently bought illumis Inc. and NRS, the latter a venerable compliance planning and tracking product long familiar to many wealth management firms. illumis’ software offering is used to identify and mitigate risk from employee political contributions.

In June, ComplySci received a $120 million growth equity investment from private equity firm K1 Investment Management, which has helped fuel its acquisitions.

Another recent development of interest for those that follow the compliance technology sector closely is the addition of Smarsh founder and former CEO Stephen Marsh to the ComplySci board of directors in August.

While ComplySci and Smarsh might at first blush look like competitors, the two firms have only small levels of overlap in their offerings with many being complementary. Both are K1 portfolio companies.

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