Top RIA Compliance News Articles for the Week of March 18, 2017

1. Labor Secretary Nominee Alexander Acosta Spars With Elizabeth Warren Over Fiduciary Rule (Author- Maggie McGrath, Forbes)

Forbes’ Maggie McGrath reports that on Wednesday, members of the U.S. Senate questioned Alexander Acosta, nominee for Secretary of Labor. One topic of conversation was the DOL fiduciary rule since Acosta would be in charge of enforcing the rule if no delay happens before he takes office. Senator Elizabeth Warren did not hesitate or hold back when it came to questioning him on how he will handle the future of the fiduciary rule. An overview of their confrontation at Acosta’s nomination hearing can be found in McGrath’s article.

2. Fiduciary Advocates Push Alternative Approach to DOL Rule (Author- Andrew Welsch, Financial Planning)

Andrew Welsch reports in his Financial Planning article that, “fiduciary advocates are going on the offensive even as the DOL fiduciary rule appears to be dying a slow death.” According to Welsch, “investing legend Jack Bogle, the Institute for the Fiduciary Standard and a group of advisers are promoting a set of fiduciary best practices for planners to adopt.” Welsch also reports, “their efforts will help ensure insure investors have better access to fiduciary level advice, even if the Labor Department’s rule is overturned or watered down.” Presently, the DOL has proposed delaying the rule’s implementation date by 60 days while President Trump completes a review of the rule.

3. Dodd-Frank ‘Should Be Looked At,’ SEC Nominee Clayton Says (Author- Melanie Waddell, Think Advisor)

According to Melanie Waddell of ThinkAdvisor, President Donald Trump’s nominee for the next chairman of the Securities and Exchange Commission (“SEC”), Jay Clayton, claims he “doesn’t have any specific plans for attack” when referring to the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, Clayton does believe Dodd-Frank should be looked at and analyzed to see if it is achieving its objectives. Clayton states, “the question of whether Dodd-Frank has been effective is on the minds of the administration.” Clayton continued to voice his opinions on the role of the SEC during his confirmation hearing before the Senate Banking Committee that took place on Thursday.

4. RIAs Make the Case for Charging On a Client’s Total Net Worth (Author- Jeff Benjamin, Investment News)

The method by which a firm charges fees to clients has been a recent hot topic within RIA industry. Jeff Benjamin, Senior Columnist at Investment News, reveals that seventeen years ago, the advisory firm Brighton Jones begin billing clients based on their total net worth. “It was a rare and innovative fee structure in the financial planning business,” Benjamin states. Benjamin also notes that 85% of independent registered investment advisers charge clients a fee based on assets under management or advisement. However, it’s important to note there are still some regulatory concerns with this type of fee structure.

5. On Cybersecurity, Clients Have a Lot to Learn (Author- Danielle Andrus, Think Advisor)

Danielle Andrus from Think Advisor authored this article on the importance of a firm’s clients being informed of and practicing the most important cybersecurity best practices. According to Andrus, only “54% of consumers were able to identify a phishing attack out of several examples.” Client age also played a factor in the results. With these revelations taken from data collected last summer, Andrus writes there is a “clear opportunity for advisors to help their clients with cybersecurity issues.” In addition, cybersecurity remains a regulatory hot topic.

Don’t forget to check out last week’s top RIA compliance news articles on the DOL fiduciary rule and potential Dodd-Frank rule-making. Be sure to check back next Friday for next week’s top articles!