Three Crucial Considerations When Selecting a Verification Firm: People, Process, and Fees

As firms begin annual budget planning, it’s common to reassess trusted service providers and determine whether current partnerships still meet organizational needs. If your firm hasn’t evaluated its verifier recently, the CFA Institute’s verifier questionnaire is an excellent starting point. In addition to those questions, the following three‑point checklist offers a concise framework for assessing your existing verification firm or comparing new options.

People

People remain the most influential factor in anyverification engagement. Even in an era of advanced technology, the experience, judgment, and service mindset of the individuals conducting your verificationare central to its quality.

A key question to ask is: “What is the breadth anddepth of the team working on our engagement?” Many verification firms rely heavily on a single senior professional, which creates risk if that individual departs or retires. Even when a senior–junior pairing exists, it’s important tounderstand how the team collaborates with you. Are junior professionals learning from seasoned experts, or do they appear to be working in isolation? A well‑structured team ensures continuity, knowledge transfer, and a more resilient verification process.

Cascade’sapproach reflects this team structure in practice. Junior professionals may beassigned to manage the day-to-day execution of an engagement, giving clients aconsistent and responsive point of contact. Throughout the engagement, theywork closely with senior professionals and partners, who provide guidance,review key judgments, and become directly involved when complex matters arise.

Process

The CFA Institute outlines the core steps everyverification firm must follow—from engagement letters and risk assessments totesting, representation letters, and the final opinion. However, the effectiveness of these steps depends heavily on communication.

Ask: “How effectively does the verification firmcommunicate before, during, and after the engagement?” Timely follow‑ups, structured check‑ins, and clear documentation all influence the efficiency and accuracy of the verification. For longer or more complex engagements, weekly, bi‑weekly, or monthly calls may be essential. It’s also important to understandhow your verifier stays informed—and keeps you informed—about regulatorydevelopments that affect performance and marketing practices.

At Cascade, clients receive timely call summaries afterevery scheduled call, ensuring the entire team remains aligned on key issuesand next steps. Partners and senior professionals participate directly in thesediscussions, reinforcing transparency and continuity. Strong communication fromyour verifier supports a more effective compliance program.

Beyond theverification itself, consider whether the firm offers a ‍consultative business model. Do they provide insight into regulatory requirements outside the GIPS Standards when reviewing marketing materials? Since FINRA’s Regulatory Notice 20‑21 and the SEC Marketing Rule went into effect, this capability has become increasingly important. Even when firms work with a separate service provider to help with regulatory compliance, your verifier can still offer valuable insight into specific performance requirements.

Fees

Fees naturally come into focus during budget season, butthey should be evaluated alongside the quality of people and process. Askwhether you are working with professionals who collaborate well, communicateconsistently, and serve as trusted partners throughout the year. Consider howimportant a consultative model is to your firm—some verification providerscharge separately for consulting, while others include it as part of their coreservice.

Unlike asset managers, verification firms do not benefitfrom rising AUM, so periodic fee increases are often necessary to keep pacewith inflation. However, significant fee hikes without clear communicationundermine the value of the relationship. As a 100% employee‑owned company,Cascade Compliance does not automatically increase fees annually and offerscontractual fee‑increase caps to support long‑term planning and trust.

Conclusion

Selecting a verification firm is a meaningful decisionthat should be grounded in a thoughtful evaluation of people, process, andfees. By asking the right questions and assessing these three components, yourfirm can choose a verification partner that aligns with your expectations andstrengthens your compliance program. The right verifier can meaningfullyinfluence your organization’s operational success and confidence in itsperformance reporting.

Cascade Compliance’s senior professionals bring more than 70 years of combined experience with SEC regulations, the GIPS standards, andperformance. Our team has worked with hundreds of firms across the U.S. andinternationally. Sharing best practices and industry insights is one of themost rewarding aspects of our work. Whether you are a client or simply seekingguidance, we are here to help. Contact us at connect@cascadecompliance.com.

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