RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of July 15th, 2022

Posted by RIA in a Box

Jul 22, 2022 4:19:12 PM

This week's recap focuses on the Securities and Exchange Commission's ("SEC") examination priorities, cryptocurrency, and a recent SEC bulletin emphasizing serving clients' best interest.

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 the RIA industry outlook, navigating cryptocurrency oversight, a potential increase of regulation of Form CRS, and the Securities and Exchange Commission's ("SEC") latest stance on gamification of digital trading. Here are our top investment adviser compliance articles for the week of July 15th, 2022:

Best Practices for Third-Party Vendor Management Compliance

    1. Schwab benchmarking report shows strong RIA growth, hiring challenges ahead (Author – Jeff Benjamin, InvestmentNews)

This article highlights findings from the 16th annual Schwab RIA Benchmarking Study on the financial planning industry. One of the key findings concludes that financial firms of all sizes have recently experienced significant growth in terms of assets under management (AUM). The study also suggests that recruiting talent is one of the major challenges firms face in today's market. One industry expert estimates the industry will need to hire more than 70,000 new staff members over the next five years to keep up with the RIA growth rates. The article points out how top performing firms have an average marketing and business development spend of 2.3%, compared to larger firms with 1.5% and smaller firms with 1.8%. 

    2. Compliance officers should leapfrog regulators in providing crypto trading guidance to employees (Author – Amy Kadomatsu, Financial Planning)

ComplySci CEO Amy Kadomatsu provides guidance to compliance officers on how to navigate cryptocurrency oversight within their firms. Although there are currently no crypto regulations, oversight agencies such as the SEC and the Commodity Futures Trading Commission are expected to set guidelines for financial firms to protect investors from cryptocurrency scams. It's recommended firms prepare their compliance programs and lay a foundation of preparedness to comply with future regulatory requirements. The article discusses how compliance officers are already taking cautious measures by requiring employees to certify crypto accounts and wallets, and preclear any crypto trading. 

   3. The latest in financial #AdviserTech — July 2022 (Author – Michael Kitces, Investment News)

Michael Kitces monthly tech roundup highlights the trends, announcements, and recent developments in financial technology. For this month, the roundup includes Bento Engines initiative to integrate a new feature, prompting advisers to reach out to clients based on significant age milestones. RIA in a Box and InvestorCOM partner to release the RolloverAnalyzer solution for advisers to comply with the Department of Labor's PTE-2020-02. Kitces also shares the updated version of the Kitces Advisor Tech Directory, for advisers to simply discover the various technology options available to them. 

   4. IRI Lobbies Congress To Approve SEC Funding For Reg BI, Form CRS Oversight (Author – Patrick Donachie, Wealth Management)

Patrick Donachie discusses recent activity pushing for more regulatory funding and manpower. The Insured Retirement Institute (IRI) addressed Congress in a letter urging for the approval of SEC funding to boost oversight efforts of Reg BI and Form CRS. The SEC has only recently taken enforcement actions on firms for deficiencies related to Form CRS, including not filing or posting the forms in a timely manner or failing to deliver the form to clients.  

    5. Trading ‘Gamification' Is Huge Concern, SEC Enforcement Chief Says (Author Lydia Beyoud)

This article explores how the recent gamification of digital trading has caught the attention of the SEC. Gamification is described as using game-like features to encourage decisions, or in this case, make recommendations to investors and/or encourage them to trade excessively. The federal regulator plans to propose new rules on gamification practices this year. Firms must ensure that the “digital nudges” comply with the requirement to act in the best interests of the clients when making financial recommendations.Learn More About Our Cybersecurity Platform

Don't forget to check out last week's top RIA compliance news articles that focus on top compliance challenges, LinkedIn tips for advisers, and the SEC's latest rule-makings on proxy voting.

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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