Each week we’re 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 Department of Labor (“DOL”) fiduciary rule, and the new Form ADV changes. Check back each week for the latest list of top stories.
Here’s our top investment adviser compliance articles for the week of August 19, 2017:
- What Advisers Need to Know About the SEC’s New Form ADV (Author- Robert Powell, Market Watch)
Robert Powell of MarketWatch highlights a change on the updated Form ADV: the disclosure of all firm-related social media profiles. Powell writes there are concerns that these upcoming Form ADV changes which take effect on October 1, 2017 have been overlooked in the wake of the DOL Fiduciary rule. Our own company president, G.J. King, agrees. “Our view is that with all the focus on the Labor Department’s fiduciary rule these significant changes have been completely lost in the shuffle. The changes impact every RIA firm and may require some firms to invest in new portfolio management reporting technology,” said King.
- Regulatory Considerations When Bringing On a New Advisor (Author- Chris Stanley, ThinkAdvisor)
Chris Stanley points out that there are several legal and compliance twists and turns when adding a new individual investment adviser representative to a firm. Examples include Investment Adviser Public Disclosure, or IAPD review; licensing registration via the Investment Adviser Registration Depository; distinguishing if the potential hire is an independent contractor or employee; and of course, Form ADV 2B Supplement updates, which provides disclosure and documentation.
- Interesting Angles on the DOL’s Fiduciary Rule #59 (Author- Fred Reish, Fredreish.com)
Fred Reish delivers another answer to many advisers FAQs regarding the Fiduciary Rule, specifically listing which types of plans and arrangements are covered by the new rule. He also distinguishes which items are treated as plans and IRAs. In particular, Reish references an article published by his colleagues, Bruce Ashton, Elise Norcini and Josh Waldbeser, on June 7, 2017 that notes “what’s in and what’s out” in terms of the plans and other investment accounts as it relates to the fiduciary rule
- Recent Developments on DOL Fiduciary Rule (Author-David Hamilton, National Law Review)
David Hamilton states that the DOL rule is “under constant attack on multiple fronts” resulting in several new developments. Just this month, more amendments were proposed. Representative David Roe even proposed a bill that would repeal it entirely. Hamilton laments that the future regarding the rule is vague, saying, “those impacted by its requirements will continue to be left without clear guidance as uncertainty about the fate of the Fiduciary Rule persists.”
- Seniors Financial Fraud A Hidden Problem, Regulators Say (Karen DeMasters-FA Magazine)
Karen DeMasters, of Financial Advisor Magazine, points out that senior citizens suffer from undetected financial fraud. She cites, “97 percent feel most cases of senior financial fraud go undetected until it is too late to stop or correct it.” Though more regulators are aware of criminals, the rate of fraud against seniors keeps climbing. Some state laws have been used, however, to save seniors from losing their life savings.
Don’t forget to check out last week’s top RIA compliance news articles on recent SEC cybersecurity guidance, preparing for the new Form ADV Changes, and the trend of advisors using text messages as a preferred form of communication with clients. Be sure to check back next Friday for next week’s top articles!