RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of April 9th, 2021

Posted by RIA in a Box

Apr 16, 2021 4:23:35 PM

Top RIA compliance articles focus on the SEC's scheduled rule reviews, tips for remote exams, and possible anti-money laundering policy plans for RIAs. 

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 Department of Labor’s (“DOL”) guidance to the “Improving Investment Advice for Workers & Retirees” exemption, the ESG alerts raised by the Securities and Exchange Commission (“SEC”) and strategies for marketing post-pandemic.

Here's our top investment adviser compliance articles for the week of April 9th, 2021:

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      1. DOL releases guidance on Trump-era fiduciary rule (Author – Mark Schoeff Jr., InvestmentNews)

This article highlights the key points from the guidance released this week by the DOL regarding the fiduciary rule that became effective mid-February. The guidance, in the form of an FAQ page, emphasized the regulation that concludes investment advice for retirement accounts, particularly retirement asset rollovers to IRAs, falls under fiduciary standards of care. Mark Schoeff Jr. points out that the “five-part test” to avoid fiduciary status is still in play, but it has become more difficult to maintain under this new ruling. The DOL also discusses the need to for advisers of retirement investments to mitigate conflicts of interest and can do so by eliminating the use of quotas, bonuses, prizes, or performance standards as incentive practices.

      2. SEC, NASAA Issue Alerts on ESG Investing (Author – Bernice Napach, Think Advisor)

A reoccurring topic of interest for the wealth management industry, environmental, social, and governance “ESG” investing, is discussed in this article with respect to the recent alerts raised by SEC and state securities regulators. The North American Securities Administrators Association ("NASAA") stated, “ESG funds may not be created equal, and investors should be aware if an investment is right for them, and their risk tolerance.”

Recent SEC examination findings highlighted include but are not limited to, inadequate controls to monitor and update clients’ ESG-related investing guidelines, deficiencies in proxy voting practices, and unsubstantiated or potentially misleading claims regarding ESG approaches. Advisers are addressed in the SEC alert to evaluate their ESG-related claims, marketing, and disclosures for consistency and maintain oversight by a compliance personnel.

      3. RIAs Run Risk of Falling Short on DOL Rule Compliance (Author – Patrick Donachie, Wealth Management)

Patrick Donachie provides perspective from industry experts who pose the question if registered investment advisers are prepared to comply with the DOL fiduciary rule. There is additional concern mentioned for smaller RIA firms that lack compliance departments in comparison to larger firms. Christopher Gilkerson, a senior vice president and general counsel at Charles Schwab, indicates that advisers will have to deliver new disclosures to clients around the time they make a retirement fund rollover recommendation. Gilkerson continues to discuss how Form ADV is the appropriate place to describe how the adviser is acting in their client’s best interest in the case of a retirement fund rollover to IRA.

      4. DOL Releases Fiduciary Rule Guidance (Author – Melanie Waddell, Think Advisor)

Among the anticipated guidance to the DOL’s fiduciary rule were a set of FAQs providing details on how investment professionals should comply with the new exemption. Barbara Roper, director of investor protection for the Consumer Federation of America, states “the DOL has done an excellent job of giving real substance to requirements to act in the customer’s best interest and ensure that conflicts of interest are not allowed to inappropriately influence recommendations”. Roper adds that she hopes for similar guidance from the SEC to follow with the expected confirmation of SEC chairman nominee, Gary Gensler.

      5. How Financial Advisors Can Best Approach Post-Pandemic Digital Marketing (Author – Rita RobbinsSusan Theder, FinancialAdvisor)

The virtual approaches to business development and marketing for financial advisers are said to be here-to-stay in the post-pandemic world. This article lists the go-to strategies for advisers to leverage as the following: 1) modern website updated frequently with interesting content, 2) regular cadence of digital touchpoints, 3) strategic approach to social media, 4) video conferences, 5) virtual events and 6) building relationships, not databases. Authors Susan Theder and Rita Robbins, remind readers that advisers will need to take a strategic approach to blend digital and traditional marketing going forward.

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Don't forget to check out last week's top RIA compliance news articles that focus on the SEC's plans to review various rules, tips on preparing for remote exams, and possible anti-money laundering policy plans for RIAs. 

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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