RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of December 14, 2018

Posted by RIA in a Box

Dec 21, 2018 6:10:02 PM

sec 2019 RIA audit priorities

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 the Securities and Exchange Commissions ("SEC") 2019 exam priorities, the Financial Industry Regulatory Authority's ("FINRA") updated cybersecurity best practices report, and the SEC's warning to advisors on text messaging and electronic communication. Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of December 14, 2018:

Download our 2018-2019 RIA Firm Registration Renewal Infographic

  1.  SEC'S 6 Compliance Exam Priorities for 2019 (Author-  Janet Levaux , ThinkAdvisor)

On Thursday, the SEC announced its 2019 compliance examination priorities. According to the Office of Compliance Inspections and Examinations ("OCIE"), there will be continued focus on fees in general including proper advisory fee billing, mutual fund share class selection, and wrap fee programs. 17% of SEC-registered firms were audited last year which is close to double the rate from just a few years ago. While the issues highlighted in this most recent release are certainly a priority for 2019, they are not the only issues that the OCIE will address during examinations.

  1. SEC exams to focus on investor fees and advisor conflicts of interest in 2019 (Author -Mark Schoeff Jr., InvestmentNews)

The SEC disclosed on Thursday that the agency will target disclosures of fees and expenses to retail investors along with conflicts of interests in its 2019 examinations of investment advisers and brokers. This decision was made with the protection of ordinary investors in mind. According to Mark Schoeff Jr., “The SEC will zero in on advisers who recommend high-fee share classes as well as those who participate in wrap fee programs that combine advisory and brokerage services.”

  1. Finra updates cybersecurity best practices report (Author- Ryan Neal, InvestmentNews)

While cybersecurity efforts have recently been top of mind for securities firms, FINRA says it still finds many firms 'practices to be substandard. Understanding that many firms simply don’t know or fully understand cybersecurity best practices, FINRA released the “Report on a Selected Cybersecurity Practices” that details best practices to provide guidance to broker-dealers. According to Ryan Neal, “The topics include cybersecurity controls in branch offices; methods of limiting "phishing" attacks; identifying and mitigating insider threats; elements of a strong penetration-testing program; and establishing and maintain controls on mobile devices.”

  1. The Four Biggest Cyber Risks of 2019 (Author- Sid Yenamandra, WealthManagement.com)

Sid Yenamandra reflects on 2018 and highlights some major cyber breaches that have happened this year. He mentions that 2019 is already on pace for an increased number of breaches to occur, particularly for independent financial advice firms. With that in mind, Yenamandra shares the four most significant cyber risks to look out for in 2019. These include: data breaches with third-party vendors, web and mobile apps, email phishing attacks, and personal devices.

  1. SEC warning: Advisor texting and social media on watch  (Author- Jessica Mathews, FinancialPlanning)

Earlier this week, The SEC OCIE issued released a new National Exam Program Risk Alert reminding RIA firms of their obligations related to the use of electronic messaging.  The increasingly large amount of electronic messaging taking place is causing concern for regulators and creating compliance challenges for firms. In order to help firms move towards the right path, the SEC recommended certain procedures such as prohibiting business use of certain messaging applications, employee training on adviser’s policies, and more.

Download Our Free RIA Cybersecurity Compliance Checklist

Don't forget to check out last week's top RIA compliance news articles on SEC's Regulation Best Interest Proposal, the SEC's continued focus on proper share class selections and disclosures, and the new RIA in a Box tool designed to help RIA firms prepare for an audit. Be sure to check back next Friday for next week’s top articles! 


Topics: RIA Compliance

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