RIA Compliance and Practice Management Blog

Top RIA compliance news articles for the week of Feb. 17, 2023

Posted by RIA in a Box

Feb 24, 2023 9:52:14 AM

RIA outsourcing rule

Each Friday, 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 the Securities and Exchange Commission’s (SEC) concern about the potential risks of stablecoins, financial advisers’ attitudes toward the market at the start of 2023, Wealth Enhancement Group CEO Jeff Dekko’s insights on what drives RIA growth, the effect of a Florida ruling on rollover fiduciary requirements and an overview of the SECURE 2.0 Act.

Here are our top investment adviser compliance articles for the week of Feb. 17, 2023:

Watch the recording of our annual review webinar here!


Stablecoins Attract Scrutiny in SEC’s Drive to Control Crypto (Author – Dave Michaels, The Wall Street Journal)

Stablecoins, a form of cryptocurrency designed to maintain a stable value by attaching it to an external asset like the U.S. dollar, have recently come under scrutiny by the SEC. The SEC is reportedly concerned about the potential risks of stablecoins, including market volatility, investor protection and money laundering. The SEC is looking to regulate stablecoins as securities, which would subject them to the same regulatory framework as other financial instruments. The move comes as part of the SEC's broader effort to control the rapidly growing cryptocurrency industry and protect investors from potential fraud and abuse. The future of stablecoins remains uncertain as regulators weigh the benefits and risks of this emerging financial technology.

Advisors’ worst fears coming into 2023 proving groundless, so far (Author – Jeff Benjamin, Investment News)

A new report by CoreData shows that financial advisers have a generally negative outlook on the financial markets this year. However, they are banking on a rebound in the technology sector to carry the day.

The report also shows that over half of advisers believe the current economic environment is the worst since the global financial crisis 15 years ago. Despite this view, the markets have performed better than anticipated, with the S&P 500 Index up 6.8% so far this year. The report highlights the appeal of alternative strategies to hedge downside risk but warns of potential challenges in implementing these strategies. Additionally, the report shows that advisers are increasingly turning to active managers and leaning on technology to drive growth.

RIA Edge Podcast: Wealth Enhancement Group’s Jeff Dekko on the True Drivers of RIA Growth (Author Mark Bruno, Financial Planning)

In a recent episode of the RIA Edge podcast, Wealth Enhancement Group CEO Jeff Dekko shared his insights on the true drivers of RIA growth. According to Dekko, successful RIAs focus on three key areas: culture, client service and technology.

Firstly, culture is crucial to building a successful RIA. Dekko explained that a strong culture which emphasizes teamwork, transparency and a focus on the client is essential for attracting and retaining top talent. A positive culture also helps build trust with clients, which is crucial for long-term growth.

Secondly, client service is another important driver of RIA growth. RIAs must prioritize delivering a high-quality client experience to retain existing clients and attract new ones. This includes providing personalized advice, transparent communication and efficient processes.

Finally, technology is becoming increasingly important for RIAs. Dekko highlighted the importance of leveraging technology to improve client service and streamline operations. This includes utilizing digital tools for communication, portfolio management and reporting.

Court decision drops 401(k) rollover fiduciary requirement — for now (Author – Dan Shaw, Financial Planning)

On Feb. 13, 2022 a Florida court ruling overturned the a Department of Labor (DOL) rule interpretation which placed onus on “financial advisors [to] act as fiduciaries when moving assets out of clients' 401(k)s and into individual retirement accounts.”

“The DOL policy questioned in the Florida case was issued in 2021 as part of 21 "frequently asked questions" planners have about exemptions to the ERISA fiduciary standard. Before that guidance, advisors who made one-off recommendations to rollover a 401(k) were generally not considered ERISA fiduciaries.”

However, many suspect the ruling to face an appeal in the coming months.

SECURE 2.0 Act: The RIA's Guide To IRAs (Author – Lowell A. Smith, Financial Advisor)

The SECURE 2.0 Act of December 2022 brings enhancements to retirement plans and IRAs, including allowing IRA account holders to take RMDs at age 73 instead of age 72 beginning in 2023. Some of these changes are:

  • A reduction to the excise tax for failing to take an RMD from 50% to 25% of the amount not taken.
  • The tax credit for starting a SIMPLE IRA or SEP plan has increased to 100%, up to a maximum of $5,000 for the first three plan years.
  • Small employers can receive a tax credit for employer contributions up to $1,000 per employee for the first five plan years.
  • SEP and SIMPLE plans are also now allowed to have plan contributions made to a Roth vehicle.

Changes to the taxation or repayment options for withdrawals include several exceptions to the 10% early distribution penalty, and QBADs are now subject to a three-year repayment period. In 2024, a beneficiary of unused 529 college savings plan funds will be able to roll the funds into a Roth IRA if the 529 account has been open for at least 15 years. An IRA account holder may also roll over or transfer an IRA to another IRA or plan even if the current IRA is making substantially equal payments without incurring a 10% retroactive penalty for modifying the payment arrangement.

Subscribe to Our Blog


Don't forget to check out last week's top RIA compliance news articles recapping the SEC's proposed amendment about custodianship, regulations which might debut this year and affect investment advisers, a federal court’s decision to strike down the Department of Labor’s (DOL) guidance about rollovers and how RIAs are hiring in the current state of the U.S. job market.

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