RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of December 10th, 2021

Posted by RIA in a Box

Dec 17, 2021 3:49:09 PM

client testimonials, archiving communications for remote work, and faulty fee calculations.

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 cybersecurity best practices, common fee calculation errors, RIA industry growth, and the latest compliance technology.

Here are our top investment adviser compliance articles for the week of December 10th, 2021:

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    1. 3 Steps to a Safer RIA (Author – Manuel Balderas, Think Advisor) 

Manuel Balderas warns RIAs that the greatest risk they face for 2022 will be cybersecurity threats. Cyber attacks can be detrimental to firms' relationships with their clients if personal information is leaked, and a virus alone can also cause disruption within the firm. Hackers have been targeting financial firms due to the valuable client information they hold. Balderas provides helpful tips for RIA firms to take to keep their firms safe within these three key steps: 1) minimize cybersecurity risk, 2) reduce risk from employees, and 3) preserve business continuity

    2. Local Taxes A Potential Regulatory Pitfall For Advisors (Author – Jeff Stimson, Financial Advisor)

This article points out a common error in fee calculations due to advisors miscalculating sales tax and use tax.  An industry expert emphasizes the importance of advisors to be knowledgeable of how their state sales tax regulations work, as well as whether their services make them responsible for collecting a sales tax. There is an increased difficulty in trying to determine the local sales tax rate if customers are located within the same ZIP code, but are subject to different local sales tax rates. Advisors may need to ask clarifying questions, such as, "is it the location where the services are performed, the location where the benefit of the services is received, or the location where the customer, who actually requested the service, is?"

    3. RIAs 'Must Do More to Justify Their Fees': Mariner Wealth's Bicknell (Author – Jeff Berman, Think Advisor)

Jeff Berman and Marty Bicknell, CEO and president of Mariner Wealth Advisors, discuss industry trends advice for RIA firms. Marty shares that firms should invest in organic growth and professional development for their employees. An important takeaway of this article is that RIAs face margin pressure, which Marty adds to his suggestion for firms to add services to justify their fees. "Tax, trust and estate, insurance, retirement planning, robust investment options, etc., are all services to consider," Marty states.

    4. Tracking the ‘incredible’ growth of RIAs and their plans for the future (Author – Tobias Salinger, Financial Planning)

Tobias Salinger highlights the findings from Schwab Advisors Services' annual benchmarking study. Despite the obstacles brought on by the pandemic, RIAs of all sizes show record growth for AUM and profit margins. The study found that larger firms, with over $250M in AUM, have higher operating margins than smaller RIAs due to investing in staff, marketing, strategic succession planning. Salinger also points out the continuous growth of mergers and acquisitions in the RIA market.

    5.Hearsay Builds Automated Video Preview Software to Help Overworked Compliance Officers (Author – Samuel Steinberger, Wealth Management

This article discusses the leading compliance technology for RIAs. Hearsay Systems has announced a new compliance offering, which allows Chief Compliance Officers (CCO) to supervise advisors through an automated video preview software, using speech to text technology. RIA in a Box, recently acquired by ComplySci, provides firms with an automated communications archiving and review solution. The solution allows firms to easily capture, store, and review communications such as emails and social media. 

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Don't forget to check out last week's top RIA compliance news articles that focus on RIA in a Box joining forces with ComplySci, regulatory focus on communication record keeping, advisor compensation conflicts, and the value of a firm's compliance manual.

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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