--- title: When Should an Investment Adviser Consider an Outsourced CCO? description: Discover when investment advisers should consider outsourcing their Chief Compliance Officer role to enhance compliance without the burden of full-time hires. image: https://blog.stpis.com/hubfs/shutterstock_2734158869.jpg --- [![STP\_header\_logo](https://blog.stpis.com/hs-fs/hubfs/STP%20Growth%20Child/STP_header_logo.png?width=75&height=94&name=STP_header_logo.png "STP_header_logo")](http://stpis.com) - [FAQs](https://stpis.com/faqs-fund-administration-compliance-managed-services/) - [About](https://stpis.com/about/) - [About STP](https://stpis.com/about/) - [History](https://stpis.com/history/) - [Team](https://stpis.com/people/) - [STP Careers](https://stpis.com/careers/) - [STP Culture](https://stpis.com/careers/culture/) - [Benefits](https://stpis.com/careers/benefits/) - [Diversite, Equity, Inclusion & Belonging (DEIB)](https://stpis.com/careers/deib/) - [Hiring Process](https://stpis.com/careers/hiring-process/) [Portal Login](https://portal.stpis.com/) [Connect With Us](https://stpis.com/connect-with-us/) - [Who We Serve](https://stpis.com/who-we-serve/) - [Institutional Managers Investment operations services and innovative software for the front, middle, and back office.](https://stpis.com/who-we-serve/institutional-managers/) - [Wealth Managers Custom and turnkey asset management programs to grow assets and support clients.](https://stpis.com/who-we-serve/wealth-managers/) - [Emerging Managers Best-in-class full service solution to springboard your startup to the next level.](https://stpis.com/who-we-serve/emerging-managers/) - [Private Fund Advisors Comprehensive suite of fund administration, compliance, account and investor reporting services](https://stpis.com/who-we-serve/private-fund-advisors/) - [What We Do](https://stpis.com/services/) - [Investment Operations Outsourcing End-to-end investment operations and trading services.](https://stpis.com/services/investment-operations-outsourcing/) - [Fund Services Complete suite of services that deliver best-in-class fund administration.](https://stpis.com/services/fund-administration-services/) - [Compliance Services Get oversight that keeps you compliant and ready for changing regulatory requirements.](https://stpis.com/services/compliance/) - [Managed Services Designed to reduce operational burden, streamline workflows, and help you scale without adding headcount.](https://stpis.com/services/managed-services/) - [Trade Settlements Streamline processes, increase efficiency, and mitigate risk with post-trade settlement services.](https://stpis.com/services/trade-settlements/) - [Reconciliation Services Automate reconciliation tasks and strengthen oversight with reconciliation dashboards.](https://stpis.com/services/reconciliation/) - [BluePrint](https://stpis.com/blueprint/) - [Why STP](https://stpis.com/why-stp/) - [STP Knowledge Hub](https://stpis.com/stp-knowledge-hub/) - [Perspectives Fresh, original STP content written by members of our team, covering a broad range of topics.](https://blog.stpis.com/blog) - [STP in the News Our take on industry articles and topics written by our colleagues across the financial services space.](https://stpis.com/stp-knowledge-hub/in-the-news/) - [Case Studies Explore real-world success stories that highlight how we've helped clients overcome challenges, drive growth, and achieve their goals.](https://stpis.com/stp-knowledge-hub/case-studies/) - [Strategic Insights Stay ahead of regulatory changes, operational challenges, and industry shifts. Download our strategic insights to equip your firm with expert guidance on compliance, operations, and growth strategies.](https://stpis.com/stp-knowledge-hub/strategic-insights/) Nov 2026 # When Should an Investment Adviser Consider an Outsourced CCO? ![Picture of Shane McGreevy](https://blog.stpis.com/hs-fs/hubfs/Shane%20Mcgreevy.jpg?width=50&name=Shane%20Mcgreevy.jpg) [Shane McGreevy](https://blog.stpis.com/blog/author/shane-mcgreevy) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.stpis.com/blog/when-should-an-investment-adviser-consider-an-outsourced-cco) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.stpis.com/blog/when-should-an-investment-adviser-consider-an-outsourced-cco) [Twitter icon](https://twitter.com/intent/tweet?url=https://blog.stpis.com/blog/when-should-an-investment-adviser-consider-an-outsourced-cco) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.stpis.com/blog/when-should-an-investment-adviser-consider-an-outsourced-cco) [envelope icon](mailto:?body=https://blog.stpis.com/blog/when-should-an-investment-adviser-consider-an-outsourced-cco) When Should an Investment Adviser Consider an Outsourced CCO? 7:38 As an investment adviser grows, its compliance obligations often grow with it. New clients, additional states, private funds, new investment strategies, increased marketing, and additional employees can quickly make compliance more complex. For some firms, hiring a full-time Chief Compliance Officer (CCO) is the right solution. For others, particularly emerging and growing advisers, an outsourced CCO can provide experienced compliance leadership without the cost and infrastructure associated with building a full internal compliance department. So, when should an investment adviser consider outsourcing the CCO function? **When the Internal CCO Is Wearing Too Many Hats** At smaller advisers, the CCO is frequently also the CEO, COO, CFO, general counsel, portfolio manager, or another senior executive. That structure can work when the firm is small and its operations are relatively straightforward. The challenge comes when the business grows but the compliance resources do not. The individual serving as CCO may increasingly spend time managing portfolios, raising capital, meeting with clients, supervising employees, or running day-to-day operations. Compliance responsibilities can gradually become secondary. Warning signs may include annual reviews being delayed, compliance testing becoming inconsistent, policies no longer reflecting actual practices, marketing materials being distributed without appropriate review, or regulatory filings being handled reactively. An outsourced CCO can manage the adviser’s compliance responsibilities without the distraction of operating and growing the business. **Compliance & Firm Changes** Adding a new office, employee, or client type creates obligations beyond simply updating Form ADV. Existing compliance policies need to be applied to these types of changes, and thorough documentation must be created and maintained. For example, a new hire requires evaluation of whether an IAR must become registered in another jurisdiction and whether a new state notice filing is required, application of Code of Ethics and other supervisory reporting and possibly branch office procedures. Often, firm changes not only require application of existing policies, they warrant taking a step back to look at those existing policies to determine what modifications may need to be made to maintain the firm’s compliance with applicable regulations in light of the changes. State registrants must also consider requirements that differ from the federal framework. Depending on the jurisdiction and the firm's business, these may include financial reporting, minimum net capital or net worth requirements, surety bonds, contract provisions, recordkeeping requirements, custody requirements, or additional regulatory filings. Change can create a lot of additional, sometimes unforeseen compliance obligations that take time and may get in the way when the firm’s management needs to focus on managing the change with staff, impact to operations, marketing efforts and managing growth. Advisers anticipating change or managing change can benefit significantly from centralized compliance oversight. An outsourced CCO can help monitor where the firm and its personnel are conducting business, understand change, manage compliance obligations through that change, and identify where compliance program modifications are warranted. **When the Business Is Becoming More Complex** AUM is not the only measure of compliance complexity. A relatively small adviser can have a sophisticated regulatory profile. A firm managing a private fund alongside separately managed accounts, for example, may face issues involving custody, valuation, marketing, conflicts of interest, fees and expenses, investor communications, cybersecurity, privacy, and regulatory filings. Complexity can increase further when a firm launches additional funds, expands into new states, adds employees, begins using new marketing channels, enters referral arrangements, or adds new investment strategies. An outsourced CCO can provide compliance infrastructure that grows with the business rather than requiring the firm to address each new regulatory issue independently. **When the Firm Needs More Regulatory Experience** Smaller or newly registered advisers may have limited experience with SEC or state examinations. An experienced outsourced CCO may have worked through multiple registration processes, examinations, annual compliance reviews, regulatory filings, deficiency responses, and remediation projects. That experience can help a firm move from simply having compliance policies to demonstrating that those policies are actually being implemented. This means maintaining evidence of compliance testing, marketing reviews, employee certifications, personal trading oversight, regulatory filings, cybersecurity reviews, vendor oversight, and other activities appropriate to the firm's business. When regulators examine an adviser, having policies is only part of the equation. The firm should also be able to demonstrate how those policies operate in practice. **Outsourcing the CCO Does Not Outsource Responsibility** There is an important limitation: engaging an outsourced CCO does not transfer the adviser's regulatory responsibilities to a third party. Senior management remains responsible for supporting an effective compliance program and fostering a strong culture of compliance. The outsourced CCO must have sufficient authority, resources, access to information, and involvement in the firm's operations to perform the role effectively. The strongest outsourced CCO relationships therefore look less like traditional consulting engagements and more like an extension of the firm's management team. The CCO should understand the firm's investment strategies, clients, employees, service providers, marketing activities, conflicts, and growth plans. Regular communication with management is essential. An outsourced CCO should not simply be a name listed on Form ADV. **When Is the Right Time?** There is no single AUM level or number of employees that determines when an adviser should outsource its CCO function. Generally, SEC registration is required when a firm hits $100 million in regulatory assets under management (RAUM), though some states require firms to have a named CCO. A better question is whether the firm's regulatory obligations are growing faster than its internal compliance resources. Outsourcing compliance establishes a solid compliance framework and provides expertise to address compliance gaps before they become a regulatory issue. For an adviser expanding into additional states, outsourced compliance can provide centralized oversight of increasingly complicated registration and licensing requirements. And for firms where senior executives are struggling to balance compliance with investment management, operations, or business development, outsourcing can provide dedicated compliance leadership without immediately adding another full-time executive. Ultimately, whether the CCO is internal or outsourced is less important than whether the individual has the knowledge, authority, resources, access, and involvement necessary to effectively administer the firm's compliance program. For the right investment adviser, an outsourced CCO can provide that foundation while allowing the compliance function to scale alongside the business. 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