RIA Compliance and Practice Management Blog

The findings in this blog post come from our annual survey of over 1,350 registered investment adviser ("RIA") firms that was conducted in the first quarter of 2019. This proprietary RIA in a Box study is paired with publicly accessible data provided by the Securities and Exchange Commission ("SEC"). The goal of our annual study is to understand different options that comprise each firm characteristic, and to determine whether specific characteristics affect the growth, size, or operational efficiency of an RIA firm. The focus of this blog post is to explore outsourced portfolio management fees and and trends related to portfolio management outsourcing based on current and past survey data.

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 focus on the Capital One data breach, why Regulation Best Interest (“Reg BI”) matters for RIAs, and strengthening enforcement of fiduciary duty. Check back each week for the latest list of top stories.

On July 23, 2019, the Securities and Exchange Commission ("SEC") Office of Compliance Inspections and Examinations ("OCIE") released a risk alert reminding registered investment adviser (“RIA”) firms to consider the risks associated with hiring and employing staff members with disciplinary histories and to design policies and procedures that will properly address those risks. This risk alert is a result of a series of examinations conducted in 2017 that, according to OCIE, “assess the oversight practices of SEC-registered investment advisers (‘advisers’) that previously employed, or currently employ, any individual with a history of disciplinary events (‘Supervision Initiative’ or ‘Initiative’).” This series of examinations resulted in numerous observations of deficiencies primarily related to compliance and disclosure issues including undisclosed conflicts of interest.  

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 focus on a new risk alert from the Securities and Exchange Commission ("SEC") related to employee supervision, how to plan for the new Form CRS, and the growing risk posed to client data from cyber breaches. Check back each week for the latest list of top stories.

The findings in this blog post come from our annual survey of over 1,350 registered investment adviser ("RIA") firms that was conducted in the first quarter of 2019. This proprietary RIA in a Box study is paired with publicly accessible data provided by the Securities and Exchange Commission ("SEC"). The goal of our annual study is to understand different options that comprise each firm characteristic, and to determine whether specific characteristics affect the growth, size, or operational efficiency of an RIA firm. Last week, we discussed how this year's survey findings closely mirror our findings from recent years with the average advisory fee charged at 0.96%. The focus of this blog post is to explore the total average total fees an investment advisory firm charges, including advisory fees and all underlying investment product or manager fees.

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 top compliance concerns, Form CRS, alternative investment due diligence, and the Securities and Exchange Commission's ("SEC") share-class focus. Check back each week for the latest list of top stories.

The findings in this blog post come from our annual survey of over 1,350 registered investment adviser ("RIA") firms that was conducted in the first quarter of 2019. This proprietary RIA in a Box study is paired with publicly accessible data provided by the Securities and Exchange Commission ("SEC"). The goal of our annual study is to understand different options that comprise each firm characteristic, and to determine whether specific characteristics affect the growth, size, or operational efficiency of an RIA firm. In this blog post, we focus on the advisory and total fees charged by RIA firms. Over the past three years, we have expanded our study to include not only the advisory fee charged, but also the total fee charged to client which would is intended to account for underlying investment product or third-party management fees. The focus of this blog post is on the advisory fee charged directly by the RIA firm. We'll take a look at total fees charged in a future blog post.

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 top RIA compliance concerns, Chairman Jay Clayton's reaction to criticism on Regulation Best Interest ("Reg BI"), and states working with the Securities and Exchange Commissions (“SEC”) on individual regulations. Check back each week for the latest list of top stories.

An RIA Firm's Cybersecurity Compliance Program

Beginning in 2015, the U.S. Securities and Exchange Commission ("SEC"), via its Office of Compliance Inspections and Examinations ("OCIE"), has specifically listed cybersecurity as an annual examination priority for registered investment advisers ("RIAs"). In the most recent 2019 exam priority guidance, the OCIE staff noted: "Specific to investment advisers, SEC OCIE will… continue to focus on, among other areas, governance and risk assessment, access rights and controls, data loss prevention, vendor management, training, and incident response.” While these six areas of focus for information security were first enumerated in the SEC’s September 2015 risk alert, they have remained consistently in the spotlight since then.

On June 14, 2019, the state of Massachusetts Securities Division passed an amendment that now requires all registered investment adviser ("RIA") firms registered in Massachusetts to provide clients and prospective clients with a one-page, stand-alone Table of Fees for Services. This new "Fee Table" requirement will be enforced beginning on January 1, 2020. This new state-registered investment disclosure regulation requires that the Fee Table be updated and delivered consistent with the existing updating and delivering requirements related for the Form ADV. In addition, if the RIA firm has a website, the Fee Table "must be available and easily accessible on the website."