Five Warning Signs Your MSP Isn't Keeping You Compliant

Introduction: Compliance Isn't Optional

Compliance isn't optional. Whether you're a Washington D.C. based association or a Raleigh based biomedical firm, you're required to deal with HIPAA, PCI-DSS, GDPR, SOC 2, or other industry-specific regulations. Staying compliant protects your organization from fines, legal issues, and reputational damage. Your Managed Service Provider should be your partner in compliance—not a liability.

The problem? Many businesses don't realize their MSP is dropping the ball on compliance until it's too late. The wake-up call comes as a failed audit, regulatory fines, or a data breach that could have been prevented.

After working with organizations across regulated industries for two decades, Wellforce has identified five red flags that signal your MSP isn't keeping you compliant. If you recognize these warning signs, it's time for a serious conversation with your provider—or time to find a new one.

1. They Can't Explain Your Specific Compliance Requirements

Here's a quick test: ask your MSP to explain which compliance frameworks apply to your business and what technical controls you need to meet them. If they give you vague answers, talk about generic "best practices," or seem unsure about your regulatory obligations, you've got a problem.

A competent MSP should know your compliance landscape inside and out:

• Healthcare providers need HIPAA compliance with specific encryption, access controls, and audit logging
• Any business processing credit cards must meet PCI-DSS standards
• Organizations handling European data need GDPR compliance
• State regulations like CCPA and SHIELD Act might create additional requirements

But knowing the regulations isn't enough. Your MSP needs to understand how these requirements translate into actual technical implementations. Which data needs encryption? Is encryption required at rest and in transit? What encryption standards are acceptable? How do you document compliance?

When your MSP can't clearly explain your regulatory requirements or how their services address them, you're operating with serious compliance risk. During an audit, you'll need to demonstrate how your IT infrastructure meets regulatory standards. If your MSP can't provide documentation or explain their compliance approach, you'll struggle to satisfy auditors—even if your security is actually decent.

Remember: compliance is as much about documentation and demonstrable processes as actual security measures. If your MSP doesn't get this, you're not truly compliant.

2. Documentation is Missing, Outdated, or Incomplete

Let me be blunt: if it isn't documented, it didn't happen. That's how auditors and regulators think. Your MSP should be continuously generating and maintaining comprehensive documentation across multiple areas:

• Network diagrams of your complete IT infrastructure
• Data flow diagrams showing how sensitive information moves through your systems
• Access control matrices documenting who can access what resources
• Change management logs recording all system modifications
• Incident response documentation detailing security event handling
• Security policies covering acceptable use and data handling procedures

When compliance frameworks require annual risk assessments, your MSP should either conduct these or provide the technical documentation a third-party assessor needs. They should maintain detailed records of security configurations, backup procedures, disaster recovery testing, and patch management.

If your MSP struggles to produce this documentation when you ask, or if what they provide is clearly outdated or incomplete, you're not compliant. Period. This documentation gap becomes particularly dangerous during audits, incident investigations, or legal proceedings where you need to demonstrate due diligence.

Many organizations only discover this gap when preparing for their first audit or responding to a security incident. At that point, reconstructing months or years of undocumented activity is nearly impossible, often resulting in audit failures or the inability to prove you had reasonable security measures in place.

The best MSPs treat documentation as an ongoing process, not an annual scramble before audit season. They should provide regular reports showing your compliance posture without you having to ask.

3. Their Approach is Reactive, Not Proactive

Compliance frameworks universally require proactive security measures, not reactive firefighting. If your MSP primarily responds to problems after they occur rather than preventing them, you're not meeting regulatory standards.

Proactive security includes:

• Regular vulnerability scanning and remediation
• Continuous monitoring for security threats
• Timely patch management with documented procedures
• Regular security awareness training for staff
• Periodic reviews of access controls
• Scheduled backup testing and disaster recovery drills
• Ongoing risk assessments that identify threats before they materialize

Reactive MSPs only patch systems after exploits are discovered in the wild. They only review access controls after unauthorized access happens. They only test backups after a ransomware attack. They only provide security training after a phishing incident compromises accounts.

This reactive approach directly conflicts with compliance requirements:

• HIPAA requires regular risk analysis to identify vulnerabilities before exploitation
• PCI-DSS requires quarterly vulnerability scans and immediate remediation of high-risk findings
• SOC 2 requires monitoring controls that detect and respond to security events in near real-time

If your MSP's security approach is primarily reactive, you're not just failing compliance standards—you're also exposing your organization to preventable security incidents. The most damaging breaches typically exploit known vulnerabilities that should have been patched or security gaps that should have been identified through proactive assessment.

Pay attention to your MSP's communication patterns. Do they regularly inform you about emerging threats relevant to your industry and explain how they're addressing them? Or do you only hear from them after something's already gone wrong? That tells you everything about whether they're managing compliance proactively.

4. No Regular Compliance Reporting or Review Meetings

Compliance isn't something you set up once and forget about. It requires ongoing monitoring, regular reviews, and continuous improvement. If your MSP isn't providing regular compliance reporting and scheduling periodic review meetings, they're not keeping you compliant.

At minimum, you should receive monthly or quarterly reports covering:

• Security event summaries
• Patch management status
• Backup verification results
• Access control reviews
• Compliance posture updates
• Regulatory changes affecting your organization

These reports should be specific to your compliance requirements—not generic security summaries that could apply to any client.

You also need regular strategic review meetings to:

• Discuss compliance posture
• Review documentation completeness
• Address gaps or findings
• Plan for upcoming audits
• Discuss how regulatory changes might affect your IT requirements

These meetings ensure alignment between your MSP's activities and your compliance obligations.

Without these reporting and review mechanisms:

• Compliance gaps go unnoticed until discovered during audits
• You can't demonstrate important compliance activities to auditors or regulators
• Changes in your business or regulatory landscape don't get reflected in your IT security approach
• Strategic compliance planning becomes impossible

Many organizations discover they lack adequate compliance reporting when preparing for an audit and realize they can't demonstrate consistent security activities over time. At that point, it's too late to reconstruct months of unreported activity, often resulting in audit findings that proper reporting would have prevented.

Your MSP should view compliance reporting as a core service, not an optional extra. If you have to repeatedly request compliance information or if they seem surprised when you ask about regulatory requirements, they're not prioritizing your compliance needs.

5. They Recommend the Same Solutions for Every Client

Every organization has unique compliance requirements based on industry, size, data handling practices, and specific regulatory obligations. An MSP recommending identical solutions for all clients—regardless of these differences—isn't providing adequate compliance support.

• Healthcare providers need HIPAA-compliant systems with specific safeguards around protected health information
• Financial services firms need controls satisfying banking regulations and SEC requirements
• Retailers processing credit cards need PCI-DSS compliant payment systems
• Organizations with European customers need GDPR-compliant data handling

These aren't interchangeable requirements satisfied with generic "best practices." They demand specific technical controls, documentation approaches, and risk management strategies tailored to the regulatory framework and your specific circumstances.

A compliance-focused MSP should start every client relationship with a thorough assessment of regulatory requirements and current compliance posture. They should ask detailed questions about your data handling practices, customer base, contractual obligations, and industry regulations. Their recommendations should specifically close gaps in your compliance posture, not just deploy generic security measures.

Red Flags to Watch For

Red flags include MSPs that:

• Don't ask about regulatory requirements during onboarding
• Propose identical security stacks regardless of industry or compliance needs
• Can't explain how recommendations specifically address your compliance obligations
• Treat compliance as an add-on rather than a core component of their service
• Haven't invested in understanding the compliance frameworks relevant to their clients

The best MSPs develop specialization in specific industries or compliance frameworks precisely because they understand these differences. If your MSP serves healthcare, financial services, and retail all with the same cookie-cutter approach, they're not serving any of those clients well from a compliance perspective.

What to Do If You Recognize These Warning Signs

If you've recognized one or more of these warning signs, here's how to move forward:

Start with a Conversation

Your current MSP might be capable of stepping up their compliance support—they may just need to understand your requirements and expectations better. Schedule a meeting specifically focused on compliance. Come prepared with specific questions about your regulatory obligations and how their services address them.

Request Documentation

Ask for copies of all compliance-related documentation they've been maintaining for your organization. Their ability (or inability) to produce this quickly will tell you a lot about their actual compliance practices.

Get an Independent Assessment

Consider hiring a third party to conduct an independent compliance assessment. This gives you an objective view of your current compliance posture and identifies gaps your MSP may have missed.

Evaluate Your Options

If your MSP can't or won't meet your compliance needs, it's time to evaluate alternatives. Look for providers who specialize in your industry and demonstrate deep understanding of your specific regulatory requirements.

Document Everything

Whatever you discover, document it. If compliance failures surface later, you'll need to show that you took reasonable steps to identify and address gaps once you became aware of potential issues.

The Bottom Line

Your MSP should be your ally in maintaining compliance—proactively managing security controls, maintaining documentation, providing regular reporting, and adapting their approach to your specific regulatory requirements. If they're not doing these things, you're carrying compliance risk that could result in audit failures, regulatory fines, or security incidents.

Don't wait for an audit or breach to discover your compliance gaps. Evaluate your MSP against these five warning signs today, and take action to address any shortcomings you identify.

Contact Wellforce today for a compliance assessment. We'll evaluate your current posture against your regulatory requirements and help ensure your IT infrastructure actually supports compliance—not just on paper, but in practice.