RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of July 8, 2017

Posted by RIA in a Box

Jul 14, 2017 1:54:02 PM

SEC uniform fiduciary rule

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 the Department of Labor ("DOL") fiduciary rule and the prospects of the Securities and Exchange Commission ("SEC") introducing its own fiduciary rule. Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of July 8, 2017:

Download the SEC 2017 RIA Top 10 Exam Priorities Checklist

  1. SEC's Jay Clayton Makes Fiduciary Duty a Priority, Acknowledges Issue is 'Complex' (Author- Mark Schoeff Jr., Investment News)

With some portions of the DOL rule now applicable to RIA firms, SEC chairman, Jay Clayton, made a statement at the Economic Club of New York regarding the prospect of the SEC introducing its own uniform fiduciary rule. "It is my hope that we can act in concert with our colleagues at the Department of Labor in a way that best serves the long-term interests of Mr. and Ms. 401(k),” he said. Investment News reporter, Mark Schoeff Jr., notes that Clayton is aware the issue is complicated, but that the leaders of the DOL and SEC have said they will work together for resolutions.

  1. How to Prove Your Compensation Is Reasonable (Author- Louis S. Harvey, Think Advisor)

Louis S. Harvey, founder of Dalbar, acknowledges that while advisor compensation is “easily determined, the role and services provided are often poorly defined.” Advisors often undervalue themselves and the services provided. Advisors that "devalue their role" can be corrected at no cost by changing a way of thinking. Harvey includes detailed advice on how advisors can correct this. He claims, "a well-articulated role and a clear description of advisor services also provides a powerful marketing message when faced with discriminating prospective clients and powerful competitors."

  1. Why Regulation Doesn't Have to Mean Restriction (Author- Sean Allocca, Financial Planning)

Sean Allocca, Financial Planning reporter, sums up his recent conversation regarding the role of regulation with NextCapital cofounder, Rob Foregger, "the more your business model is aligned with the interests of the client, the better off you may be down the road.” In providing this, advisors should be able to offer clients “easy access to personal records”, “hidden opportunities”, and “forward-thinking”. 

  1. Interesting Angles on the DOL's Fiduciary Rule #54 (Author- Fred Reish, Fredreish.com)

Fred Reish, one of our top 5 DOL fiduciary rule experts to follow, published his 54th article about his observations on the DOL fiduciary rule. In this latest post, Reish focuses on the Best Interest Contract Exemption ("BICE") provision of the DOL rule. Reish notes the DOL has issued a request for information ("RFI") regarding the future of the BICE provision. BICE “requires only that the “financial institution”—e.g., the broker dealer or RIA firm—and the adviser “adhere to” the Impartial Conduct Standards ("ICS"), says Reish. He is optimistic that the DOL will take everyone’s comments in the RFI into careful consideration.

  1. Republican Lawmaker Renews Assault On Fiduciary Rule (Author- Kenneth Corbin, Financial Planning)

Financial Planning's Kenneth Corbin reports on Missouri Representative Ann Wagner who is "circulating draft legislation that would halt the Labor Department's rollout." Wagner is actively seeking to "dismantle the regulation". Most firms and industry trade groups who attended the hearing reportedly greeted Wagner's discussion draft with support. One opponent to the draft was Christina B. Martin Firvida, the AARP's director of financial security and consumer affairs. She believed, "the legislation would do little if anything to elevate the quality of advice that retirement investors receive." Read more details and industry opinions on the hearing that took place.

Download the SEC 2017 RIA Top 10 Exam Priorities Checklist

Don't forget to check out last week's top RIA compliance news articles on the DOL fiduciary rule and new risk tolerance tools. 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.

Topics: RIA Compliance

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