[ by Melanie Gretchen ] Faced with the burden of having to comply with an expanding universe of SEC rules and regulations, more investment advisory firms (RIAs) than ever are outsourcing their compliance functions. Charles Schwab & Co. recently surveyed 820 RIAs and found that 38% of firms outsourced their compliance functions, up from 27% in 2010.  Conducted in February and March, the RIA Benchmarking Study found that mostly small- to mid-sized firms with assets of $25 million to $250 million outsourced to RIAs with more than $300 billion in assets. Their reward: 26% savings, Schwab estimated. Rick Bloom of Bloom Asset Management in Farmington Hills, MI, began talks to outsource after his most recent SEC audit took a week. Although he expect to spend $15,000 to $20,000 a year on outsourcing, he said, "I can’t necessarily hire someone who can deal with my clients as well as me." Regulatory changes. Since more than 41% of those RIAs surveyed manage less than $100 million in assets (according to the Investment Adviser Association), many advisers feel hard pressed to keep up with SEC regulatory changes, said George Tamer, director of strategic relationships at TD Ameritrade. Among other recent changes to compliance rules, the SEC imposed "plain English" requirements for advisers' ADV brochures. In addition, beginning next year, 4,000 advisers with less than $100 million in assets will answer to state regulators instead of the SEC, in a potential game-changer. Currently, advisers can address specific issues or have everything reviewed.  Brian Hamburger, founder and managing director of the regulatory consultancy, MarketCounsel, in Englewood, N.J., says the latter option can discover problems that wouldn’t be found if an adviser were just seeking a solution to a particular need, for example rewriting an ADV brochure. Which begs the question: If you don't have to do it yourself, why should you? [Registered Rep, 12/16/11]