Why Vendor Oversight Is No Longer Optional
Five years ago, “vendor due diligence” meant checking a few boxes once a year. In 2025, it’s one of the top five exam priorities across both SEC and state regulatory audits.
Why the shift?
Third-party providers now touch nearly every function in an RIA’s operation. From custodians and portfolio tech to outsourced IT and compliance consultants, vendor risk is now operational risk. Regulators know this, and they’re asking tougher questions because of it.
Annual checklists no longer satisfy. Auditors want real documentation, structured scoring, and centralized audit trails. Unfortunately, most firms are still scrambling to reconstruct reviews from emails and loose files when exam time rolls around.
And that kind of panic isn’t just stressful, it’s dangerous.
What Examiners Expect in 2025–2026
You don’t have to guess anymore. SEC examiners and state auditors are increasingly aligned in what they want to see when it comes to vendor oversight. Based on regulatory comment letters, enforcement trends, and direct examiner feedback, here’s what they’re asking for:
- Review Cadence Evidence: Can you prove you assess each vendor on a regular, defined schedule?
- Scoring or Risk Ranking: Is there a formal method for determining whether a vendor poses low, medium, or high risk?
- Centralized Documentation: Are SOC 2 reports, attestations, insurance certificates, and access policies stored together in a consistent location?
- Cyber Oversight Integration: Do your reviews include how vendors handle client data, API integrations, and information security?
It’s not enough to say you reviewed a vendor. You must be able to show how, when, and why you reached the conclusion you did.
The Operational Risk of Ad Hoc Vendor Reviews
Even growing firms with decent internal processes fall into the same trap: vendor oversight without a system.
Here’s how it usually looks:
- A spreadsheet tracks vendor names, maybe with a “last reviewed” date.
- Risk scores are decided ad hoc, often without explanation.
- Security questionnaires live in someone’s inbox, if they were sent at all.
- There’s no consistent place for attaching SOC reports or policy PDFs.
- When an exam hits, the “vendor file” is assembled from scratch, often in a panic.
This kind of process might work when you have five vendors. But it collapses completely when you’re managing 20, 30, or more.
And it only takes one poorly documented vendor, one gap in oversight, to trigger a deficiency letter.
Templates That Solve the Problem Before It Starts
Instead of building oversight tools from scratch, SRIA now provides a set of plug-and-play Vendor Due Diligence + Risk Scoring Templates, designed specifically to satisfy audit requirements.
These aren’t generic questionnaires. They’re structured to match what regulators actually ask for.
Included Templates:
- Vendor Profile Summary: Capture services provided, access level to firm/client data, and integrations used.
- Due Diligence Questionnaire: Evaluate cybersecurity, disaster recovery, financial stability, regulatory registration, and subcontractor use.
- Risk Scoring Matrix: Apply a standardized rubric to classify vendor risk (low/medium/high) based on objective criteria.
- Documentation Checklist: Track SOC reports, E&O insurance, policy disclosures, and more.
- Attestation Log: Record confirmations of annual review and any changes since the last cycle.
Each template can be downloaded, completed offline, and uploaded directly into Smartria, where it becomes part of a living compliance record.
How Templates Turn Into Systems
Templates are a starting point, but true oversight only happens when those templates evolve into a system that runs itself.
That means:
- Task assignments with automated reminders based on vendor tier
- Role-based access so the right people see the right data
- A shared scoring framework so risk assessments don’t vary by reviewer
- A centralized evidence library where reports, attestations, and notes live
- A timestamped log of every review cycle and document change
When oversight is systemic, it’s also auditable. That’s what regulators are really looking for.
And for RIAs, it means exam prep becomes a matter of minutes, not days of triage.
The Smartria Advantage: Automation That Auditors Love
Manual tracking might get the job done, barely. But as your firm grows, the operational burden of vendor oversight compounds fast.
Smartria eliminates the guesswork.
Here’s what’s built into the vendor management system:
- Centralized Vendor Library: Searchable, filterable, and structured by risk tier or department.
- Automated Task Assignment: Review requests routed to the right owners based on review cadence or vendor category.
- Custom Scoring Frameworks: Weight criteria based on what matters most to your firm: financial risk, cyber exposure, regulatory scrutiny.
- Secure Documentation Vault: Store SOC reports, data maps, policies, and attestations with permission controls.
- Audit-Ready Reports: Generate examiner-friendly exports with timestamps, review logs, and risk rationale.
No spreadsheet on Earth can do this. And no panic-folder will ever come close.
A 25-Vendor RIA That Cleared Its Audit in a Single Afternoon
One mid-sized RIA, 30 employees, 25 vendors, used to manage vendor reviews through shared folders and email threads.
They switched to Smartria’s vendor management workflow in Q1 2025. By the time exam season rolled around, here’s what changed:
- Every vendor had a profile with full review history and documentation.
- Scoring was aligned across IT, Ops, and Compliance teams.
- All evidence was stored in one place, with task logs for every interaction.
- The compliance team generated the vendor section of their audit file in under 30 minutes.
The examiner’s feedback?
“This is the most transparent and complete vendor file we’ve reviewed this year.”
What to Do Next
📥 Download the Vendor Due Diligence + Risk Scoring Templates
Get the same tools the SEC is asking about — and start your oversight system the right way.
🚀 See how Smartria automates the entire workflow
Templates are good. But automation is audit-proof.
👉 Schedule a demo to see how SRIA firms streamline vendor risk oversight.
