RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of August 26, 2017

Posted by RIA in a Box

Sep 1, 2017 2:06:40 PM

Departmet of Labor 15 day comment period of fiduciary rule delay

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. This week's recap focuses on Department of Labor ("DOL") fiduciary rule, the new Form ADV changes, and the increasing number of new RIA registrations. Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of August 26, 2017:

How an RIA Firm Can Create a Culture of Compliance Checklist

  1. DOL Set for 15-Day Comment Period on Fiduciary Rule Delay  (Author- Melanie Waddell, Think Advisor)

While parts of the DOL fiduciary rule remain scheduled to take effect on January 1, 2018, the Labor Department will be offering a 15 day comment period in regards to their new proposal to delay the remaining parts of the DOL fiduciary rule until July 1, 2018. Melanie Waddell also notes that more exemptions are on the table, pulling right from the DOL’s statement: “[we] anticipate it will propose in the near future, a new and more streamlined class exemption built in large part on recent innovations in the financial services industry”. She details the hope that the delay in implementing the rule will be used to work with the overseeing bodies to collaborate and simplify the rule.

  1. Why Brokers Can't Exactly Relax After DOL Promises to Drop BICE from Its Rule (Author- Brooke Southall, RIABiz)

The Best Interest Contract Exemption, or BICE is the focus of this article. Jason Roberts, CEO of the Pension Resource Institute, states "I have heads of broker-dealers brokers asking: Do we turn left or right? RIAs are not as paralyzed." However, as some advisors gain optimism that the BICE requirements of the fiduciary rule may be relaxed, Roberts cautions, "While a procedural change such as a further delay can be more of a rubber-stamp exercise, making a substantive change requires the DOL to propose the change, support it with data, collect and process comments, draft a final replacement BICE and send it back to OMB for approval." This will be an interesting development to watch in the coming months.

  1. Form ADV Is About to Change -- Are You Ready? (Barron's)

This Barron’s article focuses on the upcoming changes to the form ADV, lost in the shuffle with all the focus on the DOL fiduciary rule. The changes are outlined here, such as the social media disclosure and the reporting of outsourced Chief Compliance Officers. The article argues that those who don’t prepare for these updates may be in trouble. RIA in a Box President, GJ King, is quoted stressing the impact of the Form ADV changes, and urging all advisory firms to begin to get ready.

  1. State-Registered Advisers Face Fee Model Inconsistencies (Author-Liz Skinner, InvestmentNews)

Advisors registered at the state level will be facing an extra onslaught of inconsistency in addition to the DOL rule, writes Skinner. “New financial advisers are finding strange discrepancies between states in terms of the way regulators are allowing them to charge their clients fees for services,” she says. However, this issue has been a long-standing issue for many advisors in regards to the regulatory considerations when charging fixed, flat, or retainer fees. Advisors exploring this increasingly popular fee model are advised to check with their relevant state regulator(s) to ensure their fee model is not deemed to be an "unethical business practice."

  1. Mapping the Explosive Growth of RIAs  (Harry Zhang-Financial Planning)

New RIA registrations each year have more than doubled since the start of the millennium,” writes Harry Zhang of Financial Planning. State registrations are also growing at a rapid pace. Zhang credits new firms and expanding RIAs for the trend, setting their sights on being a national presence. This makes sense, seeing that the study “focused on RIAs that offer financial planning services with more than 50% of AUM attributable to individuals.”

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Don't forget to check out last week's top RIA compliance news articles on the DOL fiduciary rule and upcoming Form ADV changes. Be sure to check back next Friday for next week’s top articles! 

Lexington Compliance and RIA in a Box LLC are not law firms, investment advisory firms, or CPA firms. Lexington Compliance and RIA in a Box LLC do not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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