Compliance is now a risk factor in its own right that financial planners and investment businesses must take into account. This article examines some of the details.

The following article explains why the compliance angle in financial planning isn’t just some annoying feature – it is now integral to wealth planning conversations. The regulatory world has become a class of risk of its own that must be factored into investment and goal-setting. To discuss such matters is Alex Tsepaev (pictured), chief strategy officer of B2PRIME Group. (See a previous article from him.) The editors are pleased to share these views and invite replies.

The usual editorial disclaimers apply. Email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com.

Alex Tsepaev

For years, compliance has been viewed by most of us as a necessary but burdensome back-office function – a cost center to be minimized, a series of boxes to be checked. The words “disclaimer” and “disclosure” were mostly perceived as a sort of FDA-approved safe packaging and a mandatory list of ingredients and nutrition facts. 

For most financial planners, especially those working in the US, UK and EU jurisdictions, it was the domain of legal teams and auditors, not a factor that directly shaped portfolio construction. But that's a 20th-century mindset. It’s hard to deny that the regulatory landscape, for better or worse, has been massively shifting nowadays. 

Legal compliance no longer tenuous
First of all, regulatory compliance ceased to remain straightforward and uniform for all situations across the board. For example, recently, the US SEC and CFTC said they were going to permit trading of select spot cryptocurrencies (primarily bitcoin) on US-registered exchanges such as the NYSE, Nasdaq, Cboe and CME. This move reflects the massive scale of new regulatory developments. Therefore, regulation and law enforcement – undergoing a major overhaul – have evolved beyond mere bureaucratic obstacles; they have become a new, critical “asset class of risk” that must be weighed alongside traditional concerns like inflation, credit risk, and market volatility. Ignoring it is no longer an option.

For financial planners, this shift is anything but academic. What once passed as a routine update now demands strategic recalibration. Compliance isn’t a nuisance delegated to operations – it’s a front-office imperative that defines what we can offer, how we structure accounts, and whether our advice holds up under scrutiny.

The global landscape reinforces the ordeals of this ongoing transition. In particular, Europe’s AMLA and MiCA frameworks have effectively ended the era of jurisdictional arbitrage. The old playbook – using “light-touch” hubs for globally mobile clients – is obsolete. Today, access to financial products is inseparable from regulatory alignment. That adds predictability, yes – but it also constrains agility. Capital is no longer frictionless, and planners must adapt accordingly.

Digital assets aren’t wreaking havoc; rather, their integration isn’t a straight line
Digital assets may be technologically novel, but their legitimacy in a portfolio still hinges on traditional financial metrics. Speculative exposure via offshore wallets or unregulated platforms no longer meets the threshold for professional-grade investment. Institutional-grade custody, SEC/FINRA alignment, and full KYC/AML protocols aren’t optional – they’re baseline requirements. Innovation is welcome, but only when paired with governance frameworks that support transparent valuation and auditable risk.

For financial planners, this isn’t a philosophical shift – it’s a structural one. Embedding compliance into the core of advisory practice is now a prerequisite for fiduciary integrity. Advisors who treat regulatory architecture as a strategic input – not a reactive constraint – are better positioned to deliver durable value. In a landscape where trust is built on verifiability, not velocity, rigor becomes the differentiator. Clients aren’t just asking what they can invest in; they’re asking how it’s being vetted, held, and monitored. That’s the new standard.

This is not a setback; it's a call to action. It’s an argument in favor of active portfolio management and an opportunity to transform compliance from a reactive chore into a proactive part of an added value proposition. Every financial planner’s expertise in these areas becomes a competitive advantage, proving that you are not just a market analyst but a true strategic partner in a client’s long-term financial life.

Transatlantic convergence in regulatory compliance
As I've observed, the end of regulatory arbitrage in Europe – a concept financial firms have long exploited – offers a potent lesson for advisors with globally exposed clients. The implementation of AMLA/MiCA regulation means that firms can no longer hop between jurisdictions to find the "lowest-friction hub." The era of playing "jurisdictional hopscotch" to escape strict rules is over, and advisors who fail to recognize this will find themselves and their clients exposed to unnecessary risk and compliance fatigue. 

The harmonization of AML standards and crypto asset regulation across the EU means that clients operating across geographies will face a more unified compliance landscape. Planners must now anticipate that global clients will be subject to increasingly synchronized scrutiny, and that legacy assumptions about regulatory gaps or “safe havens” are rapidly eroding.

I believe that this seemingly fragmented patchwork of conflicting mandates is now slowly but surely consolidating. This forces advisors to confront a more rigorous, unified standard – requiring them to either comply or downsize their practices. Nothing in between. As institutional money moves into new asset classes, the restrictive narrative has been gradually replaced by an influx of phenomena connected to a new reality. Responsibly integrating digital assets into a portfolio is only possible through a strict, compliance-first approach. 

Embedding compliance into the core of advisory practice no longer optional
Ultimately, embedding compliance into the core of an advisory practice is a powerful way to build and reinforce trust. When a client sees that you're not just chasing returns but are also proactively managing the complex risks that define our world, it strengthens their belief in your long-term value proposition. Once again, compliance must no longer be perceived as a burden to be tolerated; it must be accepted as a new form of fiduciary duty. It must show clients that you are a steward of their assets and financial future, not just a diligent allocator of their capital. 

This evolution offers a compelling lesson: regulatory clarity is not a threat – it’s a prerequisite for trust. Advisors must partner with custodians that offer qualified custody, robust cybersecurity, and transparent reporting. Anything less risks reputational damage and regulatory exposure. The days of speculative crypto exposure via offshore wallets or unvetted exchanges are over for serious planners. Instead, digital assets must be treated with the same rigor as traditional securities – subject to KYC, AML, and suitability standards.

Final words
Advisors who proactively align their practices with emerging global norms will be better positioned to serve clients whose assets, businesses, or citizenships span multiple jurisdictions. It also underscores the importance of due diligence in cross-border asset allocation, especially in sectors like digital assets, where volatility and opacity have historically outpaced regulation.

Ultimately, the convergence of global regulation and the maturation of digital asset infrastructure present an opportunity for advisors to lead – not lag. By embracing compliance as a strategic asset, planners can offer clients exposure to innovation without compromising on governance. That’s not just good practice – it’s the future of cross-border wealth management.