Top RIA Compliance News Articles for the Week of July 20, 2018

1. Cybersecurity Is Still Advisors’ Top Compliance Worry: IAA Poll (Author- Melanie Waddell, ThinkAdvisor)

According to the poll in the recently released Investment Adviser Association (“IAA”) survey, 81% of RIA firms continue to rank cybersecurity as their top compliance challenge. As reported by Melanie Waddell, ” IAA’s 13th annual poll, the 2018 Investment Management Compliance Testing Survey…found that other compliance hot topics include complying with the Securities and Exchange Commission’s Advertising Rule as well as the new disclosures relating to separately managed accounts on Form ADV.”

2. SEC nominee Roisman stresses disclosure, helping investors understand adviser relationship (Author- Mark Schoeff Jr., Investment News)

As reported by Mark Schoeff Jr., “Securities and Exchange Commission nominee Elad Roisman avoided taking a position on the agency’s investment advice reform proposal Tuesday and stressed the importance of disclosure when pressed by Democratic senators on advice standards.” Although pressed by Sen. Elizabeth Warren, Elad Roisman stood his ground regarding a neutral stance on the issues. “If confirmed, Mr. Roisman would replace Republican SEC Commissioner Michael Piwowar, who departed earlier this month,” writes Schoeff Jr.

3. Democrats criticize SEC advice rule, push for fiduciary standard (Author- Mark Schoeff Jr., Investment News)

Recently, Democrats have expressed that they don’t believe the SEC has gone far enough with the proposed Advice Rule. As reported by Mark Schoeff Jr., “If Democrats take over the House — which many analysts see as a good possibility — and perhaps the Senate — a long shot — the outcome also could potentially affect the Securities and Exchange Commission’s investment advice reform proposal.” In a recent letter, Democrats argued that the advice rule is too week. “They wanted the SEC to pursue a uniform fiduciary standard for retail investment advice.” The SEC is seeking comments for its proposed advice plan until August 7th. 

4. Vet your tech like an executive hire (Author- Eric Clarke, FinancialPlanning)

How closely are you vetting your firm’s technology partners? According to Eric Clarke, “You and your technology partners need to evolve in the same direction toward a shared vision for the future, or a breakup may be inevitable. There is nothing more frustrating to an RIA than the inability to grow because your tech partner — or any partner for that matter — is not keeping pace with innovation in the industry…” Clarke continues to state the importance of “feeling out your prospective tech partners’ commitment to innovation.” To read his tips on vetting technology vendors, click here.

5. FINRA Board OKs E-Signature, Custodian Proposals (Author – Melanie Waddell, ThinkAdvisor)

As reported by Melanie Waddell, “The Financial Industry Regulatory Authority “FINRA” approved at its July board meeting rule proposals to expand the categories of persons allowed to act as custodians of the books and records of firms leaving the business, as well as the use of electronic signatures in authorizing the use of discretion in a customer’s account.” In addition, the rule proposals “also included Board approval of a Regulatory Notice seeking comment on a plan to expand the summary firm data that FINRA publishes on its website relating to over-the-counter (OTC) trading volume, along with a plan to provide firms more time to report to FINRA’s Trade Reporting and Compliance Engine (TRACE) their transactions in U.S. Treasury securities to hedge primary-market transactions and also adopt a new modifier to identify such transactions.”

Don’t forget to check out last week’s top RIA compliance news articles on the factors driving advisors to independence, SEC Regulation Best Interest, and potential complications of surpassing $1 billion in AUM. Be sure to check back next Friday for next week’s top articles!