Top RIA Compliance News Articles for the Week of August 24, 2018

1. A Succession Plan For A Working Until Death Advisor (Author- Asia Martin, Financial Advisor Magazine)

According to a recent article by Asia Martin for Financial Advisor Magazine, “only 27 percent of financial advisors have a documented (succession) plan.” Stephan Cassaday, Chariman and CEO of Cassaday and Co., “swears he won’t retire.” This is the case for many advisors. As a first step towards his succession plan, “he recruited individuals 20 years his junior.” Martin writes, “for financial advisors who have no plans to retire because they enjoy working with their clients, sometimes called an advisor for life or a lifestyle advisor,”a succession plan is a competitive advantage for their firm. Their clients know they have the option of a long-term and multi-generational relationship with a business, the senior advisor knows that their book of business will be looked after as they would have cared for it and the junior advisor gets not only mentorship, but the opportunity to inherit a business.” 

2. SEC orders new enforcement hearings as a result of Supreme Court ruling (Author- Mark Schoeff Jr., InvestmentNews)

According to a recent article by Mark Schoefff Jr., “The Securities and Exchange Commission will retry more than 100 enforcement cases initially decided by in-house judges who the Supreme Court ruled were not properly put in office. Last week, the SEC issued an order ratifying the appointments of six administrative law judges to comply with the Supreme Court ruling issued earlier this summer. They were initially selected through a civil service process rather than being approved by SEC commissioners.” As a result, approximately 130 enforcement cases will be given the opportunity for a new hearing by a judge who had not previously heard their case. 

3. SEC Regulation Best Interest an important step for our industry (Author- Dale Brown, InvestmentNews)

“The Securities and Exchange Commission’s introduction in May of a proposed best-interest standard of care for all advisers — including those affiliated with broker-dealers and RIAs — was a watershed moment for the financial advice profession.” Per Dale Brown’s article in InvestmentNews, “The Financial Services Institute (“FSI”) has supported a uniform best-interest standard that would be crafted and enforced by the SEC as the appropriate jurisdictional agency since 2009, before Dodd-Frank became law. After years spent debating, preparing for and successfully litigating the Department of Labor’s unworkable fiduciary rule, the SEC’s leadership on this issue is a welcomed development, one that places the key decisions on our industry’s regulatory framework in the hands of the agency that is best qualified to address them.”  To read more on what FSI has to say about Reg BI, click here.

4. Merrill Lynch brings back commission-based retirement accounts (Author- Andrew Welsch, FinancialPlanning.com)

In response to the Department of Labor’s now defunct fiduciary rule, Merrill Lynch is reversing a ban on commission-based retirement accounts. According to Andrew Welsch of FinancialPlannning, “The policy had been under review since a federal appeals court vacated the fiduciary rule earlier this year. Some Merrill brokers may applaud the decision as the ban had in their view hindered how they could serve clients.” According to a person familiar with the matter, “the firm will reintroduce brokerage capabilities in individual retirement accounts by Oct. 1.” In addition, “Merrill Lynch will also review its supervisory routines for clients’ brokerage activity. The firm also intends to provide additional disclosure information about the brokerage relationship to clients.”

5. Micael Kitces’ #FASuccess Podcast: Going Independent with René Nourse (Author – Michael Kitces, WealthManagement.com)

In Michael Kitces 87th episode of his Financial Advisor Success podcast, he and his special guest, René Nourse, discuss the systems that René uses to run her business, the unique way that she structured her “contact us” page to engage prospects, the process that she went though to break away from the wirehouse and create her own independent RIA firm, and how she retained the trust of her clients even without the big-name wirehouse firm behind her. Click here to listen now.

Don’t forget to check out last week’s top RIA compliance news articles on the DOL fiduciary rule, cryptocurrency, and the continued migration from the independent broker dealer to RIA space. Be sure to check back next Friday for next week’s top articles!