RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of December 31st, 2021

Posted by RIA in a Box

Jan 7, 2022 3:18:21 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 anticipated regulatory changes for 2022, RIA cybersecurity threats and best practices, and the Securities and Exchange Commission's "SEC" Marketing Rule. 

Here are our top investment adviser compliance articles for the week of December 31st, 2021:

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    1. Expect Reg BI Enforcement Actions, DOL Rollover Crackdown in 2022 (Author – Melanie Waddell, ThinkAdvisor)

Melanie Waddell covers the anticipated regulatory activity impacting RIAs for 2022. The SEC recently published a statement regarding compliance with Form CRS, and is expected to continue with enforcement actions for firms that fail to comply with the disclosure requirement. RIA firms are encouraged to use Q1 to review and update their Form CRS, as updated filings are due by March 31st.  

Waddell also points out that the Department of Labor ("DOL") has made progress in developing the structure of the new fiduciary rule. The DOL is expected to propose amendments to the definition of a fiduciary in the five-part test, and publish clarifications on existing PTEs.                                                                                                           

    2. Advisers struggle with data security — and worry about the consequences (Author – Sean Allocca, InvestmentNews)

Cybersecurity is a recurring topic of concern in the wealth management industry, with attacks becoming more prevalent and sophisticated. Specifically, ransomware poses an immense threat to firms with the rise of remote workers using unsecured wifi connections. This article stresses the importance of properly storing data, not only to protect the data from criminals, but to remain compliant. The SEC has continuously released risk alerts and guidance related to cybersecurity risks, noting that automation is an industry best practice to safeguard your firm.  

    3. 3 Steps for Tackling Cybersecurity This Year (Author – Patrick Donachie, ThinkAdvisor)

This article presents three key steps firms should take to protect their data and their clients from cybersecurity threats. It's safe to say that remote work is here to stay, which is why firms must ensure their cybersecurity protocols and procedures properly address all relevant risk factors. Firms should elevate their cybersecurity programs to protect against increasingly sophisticated cyber threats. Lastly, plan ahead for operational changes, such as switching from desktops to laptops. These shifts will affect your cybersecurity plans, as well as the firm's bottom line. 

    4. Implementing a social strategy that won’t get you fined by the SEC (Author – Jim Zuffoletti, InvestmentNews)

The SEC's new Marketing Rule brings new opportunities for investment advisers to market their services. Jim Zuffoletti highlights the potential compliance pitfalls related to marketing on social media and messaging apps.  In example, advisers must be careful not to reshare or "retweet" an endorsement related to their firms services unless they include the proper disclosures and can confirm the information is not false. Webcasting and live streaming also have complex compliance rules, according to the SEC's updated language. Zuffoletti points out that investment advisers can hold live streams on platforms like Facebook without worrying about compliance standards, as long as the video is not prerecorded and distributed. The last recommendation in this article is that advisers should be aware that all advertisements, including those distributed digitally, need to be properly archived

    5. The Top Practice Management Story of 2021: Regulators Strike Back (Author – WealthManagement.com Staff, Wealth Management

This slideshow provides a roundup of Wealth Management's top five practice management articles in 2021. The list starts the same way the year past did - with Gary Gensler's nomination as SEC chairman. This article highlights Gensler's regulatory agenda along with his declared focus on improving the fiduciary standard. Other articles in the slide show cover industry concerns with amending enacted regulatory rules, the DOL's Fiduciary Rule, the SEC Marketing Rule, and findings related to firms' cybersecurity pitfalls. 

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Don't forget to check out last week's top RIA compliance news articles that focus on SEC's statement on Form CRS, a regulatory outlook for 2022, and marketing best practices 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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