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. Check back each week for the latest list of top stories.
Here’s our top investment adviser compliance articles for the week of March 12, 2016:
- What Advisers Can Expect from an SEC Exam (Author- Liz Skinner, InvestmentNews)
The Securities and Exchange Commission’s (SEC) exam experience is known to be both nerve-wracking and time-consuming for RIA firms. Knowing what to expect and preparing for the week long visit can make things less stressful and trust that everything will go smoothly. With the SEC focusing on boosting their exam rate per year, it is best to be as prepared as possible when the time comes to be examined. Check out this article to read more about the exam process beginning with the initial phone call from the SEC’s Office of Compliance Inspections and Examinations (OCIE), what to expect on exam days 1-5, and what transpires after the visit in the coming weeks and months.
- Do You Have a Tailored AML Program? Get One (Author- Kenneth Corbin, Financial Planning)
While many RIA firms already have an anti-money laundering program (AML) in place, SEC-registered firms may soon be required to implement an AML program. FinCEN is expected to publish a new regulation that would extend this requirement to all federally-registered investment advisory firms. Advisors are urged to prepare to comply with the AML rule ahead of time so they’re “where they need to be” when the rule comes out. As the article notes, it’s vital that a tailored AML policy be implemented.
- Fiduciary Rule: Why RIAS Should Beware (Author- Charles Paikert, Financial Planning)
Although about 70% of RIAs believe the Department of Labor’s (DOL) rule won’t have much of an impact on their business, the Chief Operation Officer of Fidelity Clearing & Custody Solutions, Tom Corra, suggests “all advisors should familiarize themselves with the rule’s changes to ERISA.” Check out this article to find out what RIA firms can do to be prepared for the DOL’s upcoming fiduciary rule which is likely to impact the investment management of all retirement accounts.
- Turns Out Robots Don’t Offer Conflict-Free Advice Either (Author- Megan Leonhardt, Wealth Management)
A new report by the Financial Industry Regulatory Authority (FINRA) casts doubt on the ability of online investment managers, or robo advisors, to eliminate conflicts of interest with the use of algorithms. A report was released on Tuesday by FINRA that investigated the users of these digital platforms to evaluate key service areas. The findings showed that advisors should be aware that conflicts of interest can exist even in risk profiles and asset allocations.
- Perez to Lawmakers: I’ll Walk You Through Changes to DOL Fiduciary Rule (Author- Mark Schoeff Jr., InvestmentNews)
Although there have been a number of vocal concerns expressed by members of Congress, Labor Secretary Thomas Perez stresses such concerns and over 300,000 additional comment letters in regards to the proposed rule were taken into consideration and have been addressed. While it is still undergoing review, it is likely that the final DOL fiduciary rule will be released in April.
Be sure to check back next Friday for next week’s top articles!