RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of May 22nd, 2020

Posted by RIA in a Box

May 29, 2020 3:09:23 PM

Top_Compliance_Articles_of_the_week-17Each 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 benefits of compliance software, the importance of business continuity planning, and how Paycheck Protection Program ("PPP") loans could potentially complicate business for the wealth management industry in the long run.

Here's our top investment adviser compliance articles for the week of May 22nd, 2020:

Contact RIA in a Box to create your firm's Form CRS

          1. Q & A with RIA in a Box (Author - Coryanne Hicks, USNews and World Report)

GJ King, president of RIA in a Box, discusses the benefits MyRIAComplaince has for registered investment advisors, and the added benefit of being a cloud-based software platform during COVID-19. RIA in a Box’s MyRIACompliance software serves as a solution for many tasks and challenges a Chief Compliance Officer (“CCO”) faces, and it is all on one platform. The software is constantly evolving as well, with the most recent example being the creation of the Form CRS tool to assist firms with creating the document to abide by Regulation Best Interest (“Reg BI”). King explains further, “All RIA in a Box MyRIACompliance subscribers have complimentary access to the proprietary online Form CRS tool that utilizes the firm’s existing Form ADV data, along with a short, rules-based smart questionnaire to streamline the Form CRS creation process.”

2. Small firms face greater cyber risks amid pandemic (Author - Devin McGinley, InvestmentNews) 

According to the 2020 InvestmentNews Adviser Technology Study, smaller firms are at an even greater risk of cyberthreats and attacks during the new normal of COVID-19. In the past, larger firms have always reported higher numbers of cybersecurity slips, but with increasing electronic communication and remote working arrangements, smaller firms have opened the door to many more cyberattacks. The reason behind the rising numbers is the fact that “only 43% of solo firms had policies on the use of nonbusiness devices for work, compared to 83% of the largest firms. Although the gaps were not as significant, large firms were also more likely to have encryption on all devices and continuity-of-business plans in place.”

         3. 4 Ways to Firm Up Your Continuity Plan, Now (Author - Todd Fulks, ThinkAdvisor)

Todd Fulks leads us through four important steps to take to ensure your continuity plan will stand firm in times of crisis. Between the pandemic forcing firms to work remotely and the upcoming Reg BI deadline, advisors have a lot more on their plate than usual. As a result, less pressing issues such as a continuity plan may fall to the wayside. Fulks suggests running an inventory of documents first to create a foundation and find your starting point. Focus on key details and quick, actionable steps. “A continuity plan needs to be easy to implement, include clear roles and responsibilities for each team member, and convey a step-by-step process for executing leadership changes, whether they are temporary or permanent”, Fulks explains.

         4. Staying safe on Zoom: Useful tips for advisors and clients (Author- Kimberly Foss, FinancialPlanning)

Millions of people have been utilizing the Zoom videoconferencing app to conduct business as well as foster personal relationships throughout this social distancing period. With the sudden spike in the internet-based application usage the importance of protecting our data and personal information has become vital. Online security expert Kaspersky has encouraged users to “utilize a strong password for your account that is not easy to guess. It is also wise to require two-factor authentication (usually, a text message to your mobile phone with a verification code that you enter during the sign-in process) for logging in.” Hackers have used Zoom as a way to obtain users login credentials and flood their computers or servers viruses.

           5. PPP Loans Could Haunt Advisors (Author - Jeff Berman, ThinkAdvisor) 

Given the current climate created by the COVID-19 pandemic, many advisory firms concluded that it would be in their firms’ best interest to participate in the Paycheck Protection Program("PPP") loan. Leaders across the industry have
acknowledged that there are potential risk that come with participating in the program. Rick Dennen, CEO and president of specialty lending firm Oak Street Funding, stated that “the PPP money is probably not going to enhance the value of the business and, perhaps more importantly, some will look at a firm taking a PPP loan as a sign that it’s in distress and we can’t give them credit.” As a result of the current climate firms may find it tougher to receive funding. The SEC has been stressing the importance of firms having a strong business continuity plan in place
to ensure a strong future.

Download 10 Tips for Business Continuity and Disruption Planning Checklist

Don't forget to check out last week's top RIA compliance news articles on the Securities and Exchange Commission's ("SEC") plans for remote work and Form CRS exams, compliance solutions for Chief Compliance Officers , and how advisors can use video.

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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