The Possibility of Outsourcing Compliance Operations in Investment Advisory and Agency Businesses: Regulatory Changes and Their Impact on Small and Medium-Sized Enterprises

In recent years, the number of businesses entering the "investment advisory and agency" sector has been increasing.
However, a major hurdle for entry and maintaining registration is compliance operations. Advanced tasks unique to the financial industry, such as advertising review, contract checking, and anti-social force screening, are required, placing a significant burden on human resources and costs.

Against this backdrop, the draft revision of the supervisory guidelines published by the Financial Services Agency in 2025 explicitly stated that there is "room for outsourcing" compliance operations. This is a significant change that goes a step further from the previous policy, which generally required "in-house handling."

In this article, I will explain the following in an easy-to-understand manner for all note readers:

• What the regulatory change means

• Possibilities and limitations of outsourcing

• Specific examples of tasks that are easy to outsource

• Technological innovation and AI utilization cases

• What kind of structure small and medium-sized businesses should aim for in the future
  while organizing these points.

More detailed background on the system and practical points are explored further in my blog post, so please take a look if you are interested.

■ Key points of the regulatory change: To what extent is outsourcing possible?

Previously, it was not permitted to fully entrust compliance operations to external parties.
However, the draft revision has opened up the possibility of outsourcing some tasks to external experts.

For example,

• requesting advertising reviews from lawyers

• continuing contract checks in-house
  —such a division of roles is realistically envisioned.

However, full outsourcing is still seen as difficult. The reason is that if daily judgments and supervision are relied upon solely by external parties, it may be judged as having an "insufficient substantive structure" from the perspective of maintaining registration.

■ Impact on small and medium-sized businesses

This regulatory change can be a tailwind, especially for businesses operating on a small scale.

• Being able to flexibly utilize external resources even with a small team

• The possibility of making it easier to meet human resource requirements at the time of entry

• Room to optimize registration maintenance costs

On the other hand, outsourcing is not a "magic wand" for cost reduction.
Ensuring the expertise of the outsourcing partner and maintaining an internal oversight system are essential conditions, and the key lies in how to balance "Human Resources × Outsourcing × AI Support."

■ Examples of tasks suitable for outsourcing

When considering outsourcing, it is realistic to distinguish between "tasks requiring daily judgment, which should be handled in-house" and "tasks requiring specialized expertise on a spot basis, which should be outsourced."

Tasks suitable for outsourcing

• Legal compliance checks for advertising and marketing materials

• Reviewing contract clauses (especially when introducing new products or schemes)

• Advanced database searches for anti-social force checks

• Planning and conducting external training (compliance training for officers and employees)

On the other hand, customer support and daily risk assessment require personnel with internal knowledge. Outsourcing should be positioned strictly as a complementary measure.

■ The forefront of technological innovation and AI utilization

In addition to outsourcing, AI utilization is also attracting attention. Here are some examples I have introduced on my blog.

• Nomura Group: Developed an AI that uses Amazon Bedrock to automatically determine whether promotional materials for financial products comply with laws and regulations.

• SMBC Group: Introduced a proprietary AI, "SMBC-GPT," on Microsoft Azure to streamline internal document creation and summarization.

• Hadrius (USA): Monitors emails and chats in real-time to automatically detect potential compliance violations, particularly reducing the operational burden on small and medium-sized investment advisory firms.

Such AI excels at checking tasks and assisting with document creation and is becoming a presence that complements outsourcing and in-house personnel.

■ Summary: Future Action Guidelines

Once the regulatory changes are officially applied, businesses should be mindful of the following points:

1. Secure personnel with a certain level of knowledge within the company

2. Scrutinize contract details when utilizing outsourcing

3. Combine new technologies like AI as a supplementary tool

Such flexible responses are precisely what lead to strengthened competitiveness in entering and maintaining registration for investment advisory and agency businesses.

💡 Further details on the background of the regulatory changes, key points of public comments, and practical checklists are explained in our blog post.
👉 Click here for the blog post: "Outsourcing Compliance Operations in Investment Advisory and Agency Businesses: Regulatory Changes and the Latest Practical Trends"

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✍ Operator Profile

Financial legal consultant. As a former administrative scrivener, I have extensive experience supporting IFA registration and investment advisory and agency business registration.
Currently, I provide information to practitioners interested in the financial business through my blog and note.

The Collect Financial Legal Consultant Office website provides information focusing on licensing for investment advisory and agency businesses and IFA operations.