RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of December 13th, 2019

Posted by RIA in a Box

Dec 20, 2019 4:52:24 PM

RIA Compliance Regulatory News

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 focuses on turning cybersecurity into a business opportunity, how firms are preparing for Form CRS, and how Chief Compliance Officers ("CCOs") contribute to growth at RIAs.

Here's our top investment adviser compliance articles for the week of December 6th, 2019:    

Sign-Up Now for Our Free Vendor Due Diligence Platform

1. Making cybersecurity an adviser business opportunity  (Author - Ryan Neal Jr., InvesmentNews)

Given that cybersecurity is a top concern among RIA compliance executives, Ryan Neal suggests that cybersecurity can be a “money-making opportunity” for financial advisers. By providing cybersecurity services along with financial planning services, advisers can add additional value to investors. Neal shares a story of his mother, who worked in a career in insurance and has a financial advisor who helps alleviate some of her cybersecurity concerns.

2. How Big Firms, Small Firms Are Preparing SEC's Form CRS  (Author- Melanie Waddell, ThinkAdvisor)

In this article, Melanie Waddell discusses the different approaches that firms are taking to construct their Form CRS based on their firm sizes and services offered. Panelists at Finra’s Regulation Best Interest (“RegBI”) event from firms such as Wells Fargo and smaller firms shared their unique strategies to completing the form. A common criticism of the form which is posing challenges particularly to firms who offer a variety of services is the brevity of the form. Form CRS delivery to customers will be required beginning in July 2020.

         3. Chief compliance officers help drive growth at RIAs (Really!) (Author - Matt Sonnen, InvestmentNews) 

Despite the common view that roles such as Chief Compliance Officer are a business deterrent, Matt Sonnen argues that CCOs actually drive business development. “A well-seasoned, passionate CCO helps transform an RIA by bringing an objective and mindful stance to the typically sales-oriented decision-making of the firm,” Sonnen states. He further argues that when a compliance professional assumes the role of CCO, advisors have more free time to focus on creating and retaining new clients and relationships.

         4. SEC Advances Plan to Expand Accredited Investor Definition (Author - Melanie Waddell, FinancialAdvisor Magazine)

On Wednesday, the SEC proposed amendments to the accredited investor definition expanding the qualified investors based on an investment test rather than an asset test. According to Melanie Waddell, “As the agency explained, the proposed amendments — which will be out for a 60-day comment period — would add new categories of natural persons based on professional knowledge, experience or certifications.” Waddell further breaks down the additions of the proposed amendments in detail.

           5. Ask A Client To Follow You To A New Firm? That May Violate New Finra Rules (Author - Jane Wollman Rusoff, ThinkAdvisor) 

Finra will file amendments to its suitability and noncash compensation rules to align with the SEC’s Reg BI rule. Tracey Longo interviews Finra Vice President and Associate General Counsel, Jim Wrona, who further breaks down the amendments including what constitutes a “recommendation” that will trigger Reg BI requirements. According to Tracey Longo, “We will be probably filing in the first quarter, perhaps as soon as January, amendments to the suitability rules and to the noncash compensation rule, that are not scary amendments. They’re just to make clear when Reg BI applies versus suitability to make it consistent with Reg BI,” Wrona added.

Download our 2019-2020 RIA Firm Registration Renewal Infographic

Don't forget to check out last week's top RIA compliance news articles focusing on Form CRS requirements, tension between the SEC and the brokerage industry, and investor's lack of knowledge regarding investment 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.

RIA Compliance & Practice Management

Stay up to date on the latest RIA compliance, operations, and technology topics.

Hear from industry experts as they keep you up to date on the latest regulatory developments and practice management topics.

Subscribe to Email Updates

Recent Posts