RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of August 9th, 2019

Posted by RIA in a Box

Aug 16, 2019 1:59:37 PM

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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 first steps to creating a succession plan, the growing popularity of paid bloggers, and a further breakdown of the Security and Exchange Commission's Regulation Best Interest ("Reg BI"). Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of August 9th, 2019: 

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1. How to Start Your Succession Plan (Author- Jarrod Upton, ThinkAdvisor)

The decision and timing of retirement can be a hard concept for anyone to tackle, including financial advisors, but knowing you have a capable heir to take over makes the transition smoother. Jarrod Upton discusses the different options when creating your succession plan and how to ensure that your business will still be successful once you move on. Upton breaks it down, “when it comes to finding a successor, advisors have two options: Look for someone like yourself, or find someone with a different skill set.”

2. Paid blogging is ‘big business’ for robo advisors  (Author- Bernadette Berdychowski and Sean Allocca, FinancialPlanning)

The rise in popularity of paid bloggers throughout the wealth management industry has raised a few ethical red flags recently. Both firms and regulators are focusing on whether or not paying bloggers for referrals crosses a line. April Rudin, marketing strategist and founder of The Rudin Group, stated, “Making recommendations and suitability are potential areas of conflict of interests and overstep the influence that bloggers can and should have in wealth management – regardless of robo advisor or human advisor.” However, Rebecca Neufled of Personal Capital believes their affiliate marketing strategy is what makes Personal Capital so successful, “We have a diversified approach to marketing. Our marketing team is really proud of the work we do so Personal Capital can help as many people as possible gain clarity around, and confidence in, their financial lives.”

           3. The SEC Investment Adviser Standard of Conduct: A Breakdown (Author- Beth Miller, ThinkAdvisor)

Beth Miller helps to break down the SEC's new rule-making package in a series of articles on ThinkAdvisor. The articles are meant to help better understand Reg BI, the Investment Adviser Standard of Conduct Interpretation, a firm’s Customer Relationship Summary (“Form CRS”), and Solely incidental Broker-Dealer Exclusion Interpretation. This new package addresses the meaning of fiduciary duty and how it applies to RIAs versus broker-dealers. To read the first article in the series, click here.

 4.  SEC Launches Video Series to Aid Investors Hiring an Advisor (Author- Tracey Longo, Financial Advisor Magazine)

The SEC has released a series of six short videos with the hope of making the decision process between selecting an investment adviser or broker easier for investors. Since finalizing Reg BI in June, many critics have pointed out that the new rule isn’t clear on the meaning of fiduciary duty and who it applies to. Jay Clayton, chairman of the SEC, states, “These videos are designed to describe, generally and in plain language, the differences between broker-dealer and investment advisers, arming investors with the information they need to ask better questions and help them make sound decisions for themselves and their families with their hard-earned money.”

5. RIAs hold the winning hand in a Reg BI world (Author- Knut Rostad, FinancialPlanning)

Knut Rostad provides a compelling argument that Reg BI is in fact not as harmful to RIA firms and the fiduciary standard as many believe. Even though RIAs and broker-dealers are now technically held to the same standard, “the SEC’s own research shows investors much prefer an advisor who only receives compensation from the client and who also helps the client find less costly investments. Investors want what independent fee-only RIA's offer – practices that BD's can’t offer because they’re not allowed.” Rostad goes on to explain that there are many resources out there to better understand what to look for when making the decision between a broker-dealer or an RIA. A few examples are Advisor On My Side and The Institute of the Fiduciary Standard, which Rostad co-founded.


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Don't forget to check out last week's top RIA compliance news articles focusing on the effects of the Capital One hack and crowdsourcing, implications for dually-registered advisers, investor questions for advisors from the Securities and Exchange Commission ("SEC"), and succession planning. 


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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