Top RIA Compliance News Articles for the Week of May 13, 2017

1. SEC Alerts Advisers on WannaCry Ransomware Cyberattacks (Author- Liz Skinner, Investment News)

Investment News’ Liz Skinner reports on a SEC compliance risk alert issued this week in regards to the “WannaCry” ransomware attack. . The Office of Compliance Inspections and Examinations (“OCIE”) stressed the importance of upgrading systems on a timely basis in order to stay secure. While the SEC staff, “recognizes that it is not possible for firms to anticipate and prevent every cyber-attacks,” Skinner reports that the risk alerts highlights “the importance of thinking about these issues in advance of an incident.” Furthermore, the risk alert urges RIA firms to to consider “developing a rapid response capability,” that “may assist firms in mitigating the impact of any such attacks and any related effects on investors and clients.”

2. Big Data Driving SEC Focus on Disclosures, Recommendations and Security (Author- Kenneth Corbin, Financial Planning)

Kenneth Corbin, Financial Planning reporter, discusses a recent presentation by Eversheds Sutherland attorney Adam Pollet on what advisors can expect to see in terms of potential future enforcement cases. Corbin writes, “advisers will see SEC regulators will employ new methods to investigate a firm’s staff training, the suitability of its investment recommendations, conflicts of interest disclosures and cybersecurity safeguards.” In regards to cybersecurity, Pollet notes, “just having policies and procedures alone isn’t going to be enough. Firms should consider testing, auditing and monitoring them as well.”

3. For DOL, Killing Fiduciary Rule Easier Said than Done (Author- Nick Thornton, Benefits Pro)

Efforts to delay the June 9 implementation date of the DOL fiduciary rule has been a recent discussion among the industry. Bethany Davis Noll,, an attorney with the Institute for Policy Integrity at the New York University School of Law, believes,”it’s not impossible to propose a new delay before the June 9 deadline, but there are substantial hurdles to doing so.” Benefits Pro’s Nick Thornton claims that one major hurdle in this delay will be timing. The first 60 day delay of the rule was made five weeks before the implementation date. More of the hurdles and discussion on the possible future of the rule are covered in this insightful article.

4. DOL Must Further Delay Fiduciary Rule, Lawmakers Told (Author- Melanie Waddell, ThinkAdvisor)

Opponents of the Department of Labor’s (“DOL”) fiduciary rule believe it is vital that the rule’s June 9 implementation date should be delayed. ThinkAdvisor’s Melanie Waddell provides former head of Labor’s Employee Benefits Security Administration, Brad Campbell’s opinions on the topic in her article. Campbell quotes, “the rule is, in my opinion, the poster child for inefficient regulation that will hurt the very people it’s intended to help.” Waddell notes that on April 17, members of the House Committee on Education and the Workforce sent a letter to Alexander Acosta, Labor Secretary, asking to further delay the Obama administration’s “flawed fiduciary rule.” The future of the rule is yet to be revealed but it appears unlikely the rule will be delayed again before the modified June 9, 2017 applicability date.

5. Watered Down Fiduciary Rule Could Mean More Work for Advisors (Author- Christopher Robbins, Financial Advisor)

Since the Department of Labor (“DOL”) revealed its fiduciary rule, investors are more informed and educated enough to know to ask firms whether or not they are a fiduciary. Financial Advisor’s Christopher Robbins states, “financial advisors will have to do more to distinguish themselves as “true” fiduciaries.” During the recent 2017 Inside Retirement Conference on Thursday, journalist Jane Bryant Quinn shared insight on how the rule will impact advisors. Quinn believes, “the rule, likely to pass in a watered down form, will lead to many firms applying the term “fiduciary” to their work, though they may not fully embrace the current rule’s best-interest standards.” Robbins summarizes Quinn’s informative speech in his article.

Don’t forget to check out last week’s top RIA compliance news articles on the DOL fiduciary rule and calculating regulatory assets under management. Be sure to check back next Friday for next week’s top articles!