RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of August 20th, 2021

Posted by RIA in a Box

Aug 27, 2021 4:51:34 PM

RIA Archiving, SEC regulation

Each week we are 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 Securities and Exchange Commission's ("SEC") warning to advisors on wrap fee accounts, trends in financial technology, and compliance with the SEC's Marketing Rule. 

Here's our top investment adviser compliance articles for the week of August 13th, 2021:

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     1. SEC Cautions Advisers on Wrap-Fee Accounts (Author – Robert Powell, TheStreet)

In this article, Robert Powell discusses the SEC’s recent risk alert to advisors associated with wrap fee programs. Following over 100 examinations, the SEC’s findings revealed common deficiencies associated with wrap fee programs, including insufficient compliance and effective oversight regarding the initial recommendations, as well as ongoing monitoring of such programs. The SEC also noted instances of firms’ failure to disclose conflicts, fees, and expenses.

Industry experts share their insights on how advisors can avoid these common issues with wrap fee programs. Chris DiTata, vice president and general counsel at RIA in a Box, emphasizes the fiduciary duty for advisors to act in their client’s best interest and shares “with infrequent transactions may not be well-suited for wrap fee programs.”

    2. The latest in financial #AdviserTech — August 2021 (Authors – Michael Kitces and Kyle Van Pelt, InvestmentNews)

Michael Kitces and Kyle Van Pelt share their monthly list of trends and updates related to technology and the wealth management industry. From the list of announcements, Vestwell raised $70M of capital as its 401(k)-technology platform and Harness Wealth raised $15M to fund a new adviser lead-generation service. RIA in a Box is highlighted for its announcement of the new archiving solution to complement its growing suite of compliance tools.

    3. Does Your Ad Comply With the SEC’s New Marketing Rules for Testimonials and Endorsements? (Wealth Management)

Wealth Management shared an infographic for advisors to refer to for compliance with the SEC’s new marketing rule. The posting highlights the fact that the SEC has changed the advertising rule for the first time in 60 years. With the complexity of the new rules, the flowchart in this infographic guides advisors on whether they should move forward with ads that include endorsements and testimonials. Several factors would prevent an advisor from posting the ad including if the ad does not disclose that the endorser has been paid or if the ad does not disclose conflicts of interest.

     4. Finding ROI in the adviser tech stack (Author – Nicole Casperson, InvestmentNews)

Advisors are encouraged to seek technology that integrates with core software and automates tedious tasks in order to get their return on investment in a tech stack. The technology must enable the advisors to spend more time building client relationships. One industry expert points out that these integrations allow for data to be connected to processes and information and that advisors can look for technology providers who are already using integrations within their own tech suites.

     5. Texting takes center stage in client communications (Author – Nicole Casperson, InvestmentNews)

Two fintech companies, Snappy Kraken and Redtail, announced their plans to release text messaging services for advisors to reach their clients using predetermined texts that have been approved by the Financial Industry Regulatory Authority. Snappy Kraken shared its desktop app will send text messages for setting appointments and sharing marketing content. While Redtail originally released its compliance approved texting platform in 2017, an upgraded 2.0 version is in the works. Advisers who plan to use this new technology should also prepare to be even more responsive to clients and prospects.


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Don't forget to check out last week's top RIA compliance news articles that focus on online communications monitoring, rising demand for cybersecurity insurance, an advisor's role in helping clients affected by a data breach, and the findings from a study on investor comprehension of advisor fees.

Topics: RIA Operations, RIA Compliance, RIA Technology

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does 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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