Top RIA compliance news articles for the week of Feb. 3, 2023

SEC Reveals Top Exam Priorities for 2023 (Author – Melanie Waddell, ThinkAdvisor)

Major callouts within the 2023 SEC exam priorities include: compliance with the new marketing rule, Regulation best Interest, emerging technologies and cryptocurrency.

In regard to the new Marketing Rule, “the exam division said that it will focus on whether registered investment advisers have adopted and implemented written policies and procedures to prevent violations by advisors and their supervised persons of the new rule and whether RIAs have “complied with the substantive requirements” of the rule.”

SEC to advisors: Marketing rule, Reg BI will be on the exam (Author – Dan Shaw, Financial Planning)

This article also speaks to some of the major highlights which came from the 2023 SEC exam priorities. In commenting on the requirements of the new Marketing Rule, COMPLY Chief Regulatory Officer John Gebauer, “said he thinks most advisors are going to the trouble of recording who exactly is providing them with testimonials and endorsements and any conflicts of interest they may have in doing so. He worries, though, that they aren’t taking the extra step of providing documentation showing that everything being said is true.

“Simply stating you reviewed it isn’t enough,” Gebauer said. “You need to do a little more documenting to show you delved into the testimonials or endorsements so you can say you have a reasonable basis for believing they are true and accurate.”

SEC to Consider RIA Custody Rule Changes Next Week (Author – Melanie Waddell, ThinkAdvisor)

Changes to the RIA Custody Rule could be right around the corner. The SEC plans to review proposed amendments in the coming week, in addition to amendments proposed for the recordkeeping rule and Form ADV. It is hoped that with the custody rule amendment comes some clarification, as currently, “the definition of custody is quite broad, which has led to some unintended consequences that the industry and SEC staff have grappled with over the years.”

Have the crypto and ESG revolutions been canceled? (Author – Nathan Place)

According to a survey released by Arizent, cryptocurrency and ESG investment strategies are not a high priority for many. This study surveyed 362 advisers regarding the overarching wealth management industry, specifically assessing how adviser’s clients are prioritizing investment opportunities and strategies.

“Crypto, in particular, seemed to be a non-starter. Almost half of advisers — 49% — said they did not consider digital currencies a suitable investment. For three-quarters of advisers, less than 5% of their clients were invested in crypto in 2022. For 22%, none of them were.”

Wealthtech roundup: COMPLY, Envestnet, Docupace, Ledgex, Vestmark and F2 Strategy (Author – Chris Latham, Wealth Solutions Report)

In this article, COMPLY Chief Technology Officer Helen Johnson is announced as the most recent Wealthtech Leader of the Month. In her interview she provides commentary on the unification of the COMPLY brands, which have served to bring clients a more comprehensive suite of compliance solutions including technology, consulting and education.

“This year particularly, we are focusing on increasing our data insight offerings within our product suite to better support our customers in their day-to-day activities.

By taking a holistic view in how we work and what we create, we enable our teams to provide the tools, services, education and solutions our clients need and care about most, while helping them remain in compliance within a dynamic and rapidly growing regulatory environment.”

Don’t forget to check out last week’s top RIA compliance news articles recapping how the SEC conducts its examinations, findings from the SEC’s probes of RIAs over cryptocurrencies, techniques RIAs can implement to find new clients, why some advisers aren’t following the trend of outsourcing portfolio management tasks and the surprising enthusiasm advisers have expressed toward integrating cryptocurrencies into their financial planning.