RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of April 22nd, 2022

Posted by RIA in a Box

Apr 29, 2022 4:11:26 PM

This week's recap focuses on the Securities and Exchange Commission's ("SEC") examination priorities, cryptocurrency, and a recent SEC bulletin emphasizing serving clients' best interest.

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 developing a scalable compliance program, the North American Securities Administrators Association ("NASAA") Continuing Education Model Rule, ComplySci's 2022 Chief Compliance Officer Playbook, and conflicts related to the definition of fiduciary status. 


Here are our top investment adviser compliance articles for
the week of April 22nd, 2022:

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    1. Compliance Requires Personal Expertise, Technology, Consultants Say (Author – Karen Demasters, Financial Advisor)

This week, RIA in a Box and ComplySci hosted a webinar on “Automating Compliance for Small and Mid-Sized Firms,” providing guidance on how to confront compliance challenges in an evolving regulatory landscape. Firms can leverage technology, paired with support from compliance experts, to develop a flexible and scalable compliance program. The goal is for firms to adapt to regulatory changes as they come and as the firm experiences growth, rather than making compliance requirements "a 'tomorrow' problem".  Equally important, firms must document all changes in a compliance program, and then train personnel accordingly. 

    2. Get to know the new IAR continuing education requirement (Author – Todd Rosenfeld, Investment News)

This article answers the most common questions regarding NASAA's IAR continuing education model rule. In response to the question of "why now?", Todd Rosenfeld shares how the number of RIAs increased by 50% from 2013 to 2020. There was a evident need to support the important role that IARs play in their clients’ financial lives through continuing education. To date, nine states have either enacted an IAR CE requirement or have notified NASAA of their intention to adopt the IAR CE requirement.

    3. ComplySci Publishes 2022 Compliance Guide (Author – FA Staff, Financial Advisor) 

The Financial Advisor staff provide an overview of ComplySci's release of the 2022 Chief Compliance Officer Playbook. ComplySci, a regulatory technology and compliance solutions provider, publishes the guidebook annually, compiling recent and anticipated regulatory changes, compliance challenges, and suggestions for creating a comprehensive compliance program. The article also discusses the increase of regulatory enforcement actions and CCO liability. From ComplySci's recent survey, they discovered 70% of compliance professionals are considering increasing compliance process automation in the next year due to regulatory increases. 

    4. How to protect older investors from frauds and scams (Author – Diana Li, Financial Planning)

It is widely known that fraudsters are likely to target senior citizens. Diana Li reports an estimated $3B loss per year for elderly citizens due to scams, like risky financial products, high-yield bonds with so-called guaranteed returns, or QR codes at ATM machines in local gas stations for pseudo cryptocurrencies. Li shares strategies on how elderly citizens can safely invest and protect their assets, and what signs of fraud they should be looking for.

Amy Nofziger, director of fraud victim support at AARP calls for more industry support. She says "we need interventions, systematic changes, and continue to discover other ways to tackle these crimes".”

    5. Whose Fiduciary Standard Are You Using? (Author – Jon Henschen, Financial Advisor)

The latest regulatory rule regarding fiduciaries has caused confusion for both investors and investment advisors. Jon Henschen discusses the fiduciary standard and four conflicts that "often fall through the cracks" for financial organizations like RIA firms. The four conflicts include:1) proprietary advisory platforms, 2) forgivable transition notes, 3) advisory administration fees, and 4) markups on third-party money managers’ management fees.

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Don't forget to check out last week's top RIA compliance news articles that focus on the RIA annual review process, the SEC's guidance for the term "fiduciary", and the path to independence for advisers managing $500M in AUM.

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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