RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of February 12th, 2021

Posted by RIA in a Box

Feb 19, 2021 3:10:49 PM

Top RIA compliance articles focus on the Securities and Exchange Commission's Advertising Rule and increased investigative empowerment for SEC staff.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 Department of Labor's ("DOL's") new fiduciary rule, the foreseeable return of in-person conferences, and marketing and business development opportunities on Instagram.

Here's our top investment adviser compliance articles for the week of February 12th, 2021:

How an RIA Firm Can Create a Culture of Compliance Checklist

           1. DOL Fiduciary Rule’s Impact Will Be Felt by Advisors, Brokers (Author - Patrick Donachie, Wealth Management)

In this article, Patrick Donachie brings attention to the current consensus of legal advisors that believe the DOL’s new rule will strongly impact the relationship between the consumer and advisor. The “Improving Investment Advice for Workers and Retirees” rule went into effect Tuesday, February 16th, however the DOL has stated it will be providing further guidance and that financial professionals can continue to operate under the already-issued guidance until December 2021. A. Valerie Mirko, partner at Baker McKenzie, predicts the new rule will focus on conflicts, documentation, and products such as variable annuities. Industry experts are speculating that this rule suggests the Securities and Exchange Commission's (SEC) Regulation Best Interest ("Reg BI") will not be going away anytime soon as well.

         2. DOL will let Trump-era fiduciary rule stand (Author – Emile Hallez, InvestmentNews)

The DOL’s fiduciary rule will be a hot topic of interest for the financial industry as the imminent “related guidance” will eventually set the guidelines for advisors and brokers regarding advice for 401(k)s and rollover IRAs. The rule was proposed in 2020 by the Trump administration, replacing the Obama-era version. Industry experts predict that this rule will have “more regulatory teeth than many expected” and they already consider Tuesday’s guidance to be “more consumer-friendly.” Brian Graff, CEO of the American Retirement Association, discusses how he views the exemption as an improvement on the current state of protection of plan participants and that it provides an opportunity for the industry to start implementing policies and procedures in preparation for the upcoming compliance guidelines. Graff suggests passing the exemption rule was much better than the alternative option of starting from scratch.

       3. In-Person Conferences Are Coming Back. Are Advisors Ready? (Author – Jeff Berman, Think Advisor) 

Jeff Berman informs advisors that in-person conferences are expected to return this fall. Companies such as Orion, Riskalyze, T3 Advisor, and Informa have already announced the scheduled dates for their conferences. The article lists several examples of industry professionals with a shared enthusiasm to attend the in-person conferences. There seems to be optimism in regards to the vaccine allowing the opportunity to meet face-to-face once again. All hosts mentioned in the article discuss their concerns and priorities for safety for all individuals who will be present. Advisors planning to attend should also expect for the conferences to look much different than previous years, given the social distancing guidelines and safety protocols.

         4. DOL greenlights fiduciary rule replacement, but leaves door open to changes (Author – Andrew Welsch, FinancialPlanning) 

In this article, Andrew Welsch discusses how the industry anticipates the forthcoming updates to the DOL’s new rule. The rule change is described as a “ongoing tug-of-war over regulatory standards governing advisors and brokers.” Regulators and consumer advocates are determined to provide stronger protections for investors. Deputy Assistant Secretary of Labor for the Employee Benefits Security Administration, Ali Khawar, mentions that financial firms have been preparing for the exemption to go into play since the rule was proposed last year, and that they will continue to work to improve the exemption to clearly define who is an investment advice fiduciary.

        5. Instagram reigns — for now (Author – Nicole Casperson, InvestmentNews)

Nicole Casperson points out the strong influence of social media and the opportunity to market yourself and increase business development on Instagram. Advisers are recommended to leverage Instagram for their business development because the platform draws a significant number of users in their “accumulation stage of wealth-building”. In one example, financial planner Jacqueline Schadeck, with an Instagram following of 7,400 users, discusses how she captures her audience by showing more of her own personal life versus posting only about her professional life. She has been able to arrange an average of 12 new client consultations a month to which she attributes to her social media efforts.

Download the Top 10 Social Media Compliance Guidelines for RIA Firms

Don't forget to check out last week's top RIA compliance news articles that focus on the SEC's advertising rule's impact on small RIA firms, marketing opportunities the rule provides, and the pressure of operational compliance brought on by the increased investigative empowerment for SEC staff.

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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