Each Friday, we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser (RIA) compliance and regulatory issues. This week’s recap focuses on the SEC’s new cyber rule plan, a congressional bill passed regarding small adviser firms, how advisers can accelerate the growth of their business, how financial advisers can best leverage technology and talent and the market volatility during the first quarter of the year.
Here are our top investment adviser compliance articles for the week of June 9, 2023:
SEC’s New Cyber Rule Plan Needs Changes, Trade Groups Say (Author – Melanie Waddell, Think Advisor)
Industry trade groups are providing feedback on the SEC’s proposed cybersecurity rules for broker-dealers, investment advisers and asset managers. These rules would mandate the notification of individuals affected by certain data breaches that could expose them to identity theft or other harm. The comment period for the SEC’s plan, introduced in March, concluded recently. Better Markets, represented by Stephen Hall, expressed support for the proposed rule, highlighting the importance of notifying affected individuals promptly to mitigate potential harm.
Congressional Bill Seeks to Give Small Advisor Firms a Break with SEC (Author – Dan Shaw, Financial Planning)
The U.S. House of Representatives has approved a bill aimed at alleviating regulatory burdens on small financial advisory practices. The bill, called the Small Entity Update Act, received strong bipartisan support with a vote of 367 to 8. If passed into law, it would mandate federal regulators, particularly the SEC, to consider the potential adverse impact of proposed regulations on small practices and solo financial advisers. The legislation also requires the SEC to periodically study and revise its definition of a small business entity every five years based on the findings. The bill will now proceed to the Senate for further consideration.
RIA Edge Podcast: It’s a Bull Market for Advice. But is it a Bull Market for Advisors? (Author – Mark Bruno, WealthManagement.com)
Despite the increasing demand for financial advice and the availability of opportunities, many financial advisers have struggled to capitalize on these prospects. Steve Sanduski, an adviser coach and author, highlights this disparity, stating that while there is a bullish market for advice, financial advisers themselves have not experienced the same level of success. In a podcast episode, Sanduski and Mark Bruno, the managing director of Wealth Management for Informa Connect, discuss strategies for advisers to accelerate the growth of their businesses.
How Can Financial Advisors Best Leverage the Opportunities in Front of Them? (Author – Jason Wenk, WealthManagement.com)
The demand for RIAs is currently at an unprecedented level due to various factors such as inflation, rising interest rates, regional bank failures and the retirement surge brought on by the pandemic. This has resulted in more individuals seeking the fiduciary standard provided by RIAs. To meet this demand, independent advisers are advised to focus on three key areas: go-to-market strategy, technology and talent. Refining the go-to-market strategy is crucial for consistent growth. Advisers should review their client acquisition process, including target audience, outreach channels, value proposition and methods for converting prospects into customers.
Market Volatility Exposes Generation Gap Among Investors (Author – Jeff Benjamin, Investment News)
The market volatility in the first quarter of the year, including the banking crisis, revealed generational differences in investor behavior, according to the Apex Next Investor Outlook report. The report analyzed the investing patterns of platform participants and found that younger investors, particularly Gen Z, exhibited different investment strategies compared to older generations who had experienced previous financial crises. Gen Z investors, who were still in elementary school during the 2008 crash, showed less concern about bank uncertainty and traded at a lower rate than other age groups during the bank stock sell-off.
Don’t forget to check out last week’s top RIA compliance news articles recapping on the Small Entity Update Act, electronic communications, SEC requirements for private funds and more.