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 June 18, 2016:
- Cybersecurity, Anti-Money Laundering Top RIAs’ Compliance Worries: Poll (Author- Melanie Waddell, ThinkAdvisor)
According to the just-released Investment Adviser Association (IAA) and ACA Compliance Group’s annual compliance survey, almost 20% of RIA firms have experienced a cyber breach in the last 18 months making cybersecurity a top concern. In addition, 24% of investment advisory firms claim their second largest concern to be anti-money laundering (AML) policies, three times last year’s 8%. Other concerns among advisors include data and information security as well as social media compliance. More than half of firms in the industry have adopted AML policies and procedures with 40% believing they will satisfy the proposed AML requirements. Check out this recap from Melanie Waddell to learn more about RIA compliance concerns.
- Fiduciary Self-Assessments: Hype or Help? (Author- Bob Clark, ThinkAdvisor)
Author Bob Clark recalls a graph that HighTower Advisors CEO Elliot Weisbluth showed him contrasting the difference between brokers and independents on “client centeredness” and “investment sophistication.” Brokers scored well in sophistication but lacked in client centeredness while the inverse was true of independents. In this piece, Clark connects Weisbluth’s belief with the debate over the DOL’s fiduciary rule and organizations that provide “professional credentialing,” leading him to evaluate the The Institute for The Fiduciary Standard’s self-assessment fiduciary checklist. Ultimately, Clark concludes, “…not only are these self-assessments not likely to give “professional cover” to non-professional advisors: they will more than likely provide a substantial marketing boost to professional, fiduciary advisors across the country.”
- The Greatest Risk to RIAs That’s Not in Their Portfolios (Author- Charles Steerman, InvestmentNews)
Charles Steerman cautions that since the Securities and Exchange Commission (SEC) is planning to increase the number of registered investment advisor (RIA) examiners by 20% this year, advisors should be taking necessary steps to make sure their firms are staying properly compliant. Beyond making all decisions based on the best interests of their client, Steerman argues that the greatest risks to advisors is managing their people. This article highlights some of the most common (and rosey) misconceptions held by compliance professionals and reveals the often unfortunate truth behind such misplaced confidence.
- Sheryl Garrett: How DOL Fiduciary Rule Rein In ‘Gunslingers’ (Author- Jane Wollman Rusoff, Think Advisor)
Sheryl Garrett, founder of the Garrett Planning Network, is a prominent financial advisor who has been named six times to Investment Advisor magazine’s IA 25 list of the most influential people in financial planning. In this article, ThinkAdvisor sat down with Garrett and interviewed her on how the Department of Labor (DOL) fiduciary rule will potentially “rein in ‘gunslingers.” Check out the full interview here which is a great look into the future into “how the DOL fiduciary rule will reshape advisor channels and change how advisors spend their time.”
- Financial Advisers Push Boundaries of Social Media (Author- Christine Idzelis, InvestmentNews)
Financial advisors are currently exploring new ways to connect with clients through social media platforms. Tina Powell, a partner at Beacon Wealth Management, has some personal experience in this which turned out to be quite beneficial. “It is a way for advisers to stay on top of any professional and personal development in their clients’ lives that may require special financial attention.” Wells Fargo and Morgan Stanley are also adopting this trend and trying to make it more common. Adapting to this could potentially bring in new assets and new money as well as picking up new clients through social media engagement. As author Christine Idzelis notes, as long as an advisor is staying within regulatory requirements, leveraging social media could be a great advantage to the firm.
Don’t forget to check out last week’s top RIA compliance news articles on email surveillance at Goldman and recent SEC funding activity in the Senate. Be sure to check back next Friday for next week’s top articles!