RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of July 8th, 2022

Posted by RIA in a Box

Jul 15, 2022 5:36:16 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 adviser fees, top compliance challenges, LinkedIn tips for advisers, and the Securities and Exchange Commission's ("SEC") latest rule-makings on proxy voting. Here are our top investment adviser compliance articles for the week of July 8th, 2022:

Best Practices for Third-Party Vendor Management Compliance

    1. Financial Planner Fees: What You’ll Pay (Author – Patrick Villanova, SmartAsset)

In this article, Patrick Villanova provides an overview of average financial planning fees. It's important to note that financial advisers' fees can vary depending on fee structure and the clients' specific needs. The most common fee structure for advisers is to charge a percentage of assets under management (AUM). A study conducted by RIA in a Box in 2019 found the average annual advisory fee is 0.96% of AUM. The article also includes a list of median fees based on fee structure, including standalone, retainer, AUM, and hourly, according to Kitces Research Survey.  

    2. 15 Biggest Compliance Challenges for Advisors in 2022 Compliance Concern (Author – Melanie Waddell, Think Advisor)

Melanie Waddell provides a recap of the results from the 2022 Investment Management Compliance Testing Survey. The SEC's Marketing Rule remains the top compliance concern for advisers for the second year in a row, with 69% of firms planning to comply with the rule shortly before or on the Nov. 4 compliance date. Advertising/marketing was selected by 78% of survey respondents as the “hottest” compliance topic, which is up 20 percentage points compared to last year. The results from the survey also indicated that cybersecurity, fee calculation and billing, ESG, and electronic communication surveillance are top compliance concerns for advisers. 

   3. Advisors' Top 10 Questions About LinkedIn, Answered (Author – Susan Theder, Financial Advisor)

LinkedIn reportedly has significant advantages for prospecting new clients compared to other social media platforms like Facebook and Twitter. This article shares several best practices for advisers using LinkedIn, and answers some of the most common questions about the platform. To increase visibility on LinkedIn, it is recommended that advisers comment on others' posts, ask engaging questions in posts to increase comments, and link to other articles within LinkedIn versus linking to pages on other websites. With the new Marketing Rule in mind, Susan Theder reminds advisers to check with their firm's specific compliance practices before commenting and posting on LinkedIn. According to Theder, there should be a streamlined process in place to quickly review and approve content for social media. 

   4. SEC weighs waiving some rules to regulate crypto, Gensler says (Author – Bloomberg News)

Federal regulation of cryptocurrency has been a hot topic among the financial industry for months. Digital asset companies await a clear path on how to register with the SEC. This article shares SEC Chairman Gary Gensler's latest stance on the issue, as crypto companies could potentially use disclosures to be exempt from certain securities laws to help the industry come into compliance. The recent liquidity crisis has had a significant negative impact on crypto companies, including Celsius Network Ltd. and BlockFi.

    5. SEC takes steps to free up proxy advisers, shareholder proposals (Author Bloomberg News)

This week, the SEC approved a set of rules that will impact proxy advisers and shareholder proposals. The new rules will free proxy advisers from some restrictions placed on them at the end of the Trump administration. Proxy advisers help shareholders vote on hundreds of issues, from director appointments and executive compensation to proposals on topics like workforce diversity, board independence, and environmental, social and governance issues. Supporting the rule-making, SEC Chairman Gary Gensler commented, "It is critical that investors who are the clients of these proxy advisory firms are able to receive independent and timely advice." 

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Don't forget to check out last week's top RIA compliance news articles that focus on the SEC Marketing Rule, the inaugural ComplyConnect Conference & Expo, and federal regulation on environmental, social, and governance ("ESG") investments. 

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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