RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of July 9th, 2021

Posted by RIA in a Box

Jul 16, 2021 4:05:24 PM

RIA Archiving, SEC regulation

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 a shift in adviser fee structures, a call for the Securities and Exchange Commission ("SEC") to evolve its regulation with the increase of technology use, environmental, social, and governance ("ESG") regulation. 

Here's our top investment adviser compliance articles for the week of July 9th, 2021:

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     1. Trendspotter: Advisor Fee Structures Are Shifting (Author – Melanie Waddell, Think Advisor)

This article highlights the notable shifts in advisor compensation structures according to the Investment Advisor’s Association 2021 industry snapshot. The report shows that 95.5% of SEC-registered RIA firms utilize an asset-based fee structure, with the majority of these firms also including other types of fees, such as fixed fees, performance fees and hourly charges. Melanie Waddell highlights the driving forces of this shift including new technology helping support advisors, businesses and clients are seeking more holistic fiduciary advice.

     2. Kitces Tells SEC To Adapt Its Regs To Technology (Author – Tracey Longo, Financial Advisor)

During the SEC’s Asset Management Advisory Committee Meeting, Michael Kitces of XY Planning Network voiced concern on the agency’s current regulation on advisors’ use of technology platforms for financial planning, such as robo-advisors. Specifically, Kitces calls for regulation to monitor the complexities and conflicts of interest at risk when investors rely on their advisor’s use of technology to make investment decisions for them. Kitces points out that “no one is overseeing or monitoring the advice that technology and algorithms create.”

   3. Too much regulatory oversight seen threatening ESG growth (Author – Jeff Benjamin, InvestmentNews)

Jeff Benjamin brings attention to the financial industry’s concerns regarding ESG regulation. While experts acknowledge the need for a universal structure on ESG investing from regulators, product providers, and researchers, they also have voiced the challenges that could arise from overly strict regulation. Specifically, one industry expert mentions that getting ESG funds approved for defined-contribution retirement funds could be an obstacle, considering that the benefits of ESG investments can be non-monetary. The article concludes by revealing that the momentum of ESG is expected to continue.

    4. The tech investment squeeze (Author – Ryan W. Neal, Financial Planning)

Using findings from a recent study conducted by Financial Planning, this article explores how financial firms allocated funds for technology investments in the past year, whether they plan to increase their technology budget, and whether they prioritized communication technology over practice management needs during the pandemic. Ryan Neal discusses the differences between small and large firms from the findings in the study, for example, how larger firms are often better positioned to take advantage of advanced technology and increase efficiencies.

     5. Kahl to become acting examinations chief at SEC (Author – Mark Schoeff Jr., Investment News)

This article details the announcement of Daniel Kahl, current deputy director of the examinations division of the SEC to be appointed to acting director of the division on August 14th, 2021. Kahl has been employed by the SEC since 2001 and has served as the examination division’s chief counsel since 2016.

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Don't forget to check out last week's top RIA compliance news articles that focus on RIA in a Box's Communications Archiving and Review product release, a push for Securities and Exchange Commission ("SEC") action on diversity and ESG disclosures, South Carolina legislation to protect elder financial abuse, and a call for regulation on cryptocurrency. 

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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