RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of May 27th, 2022

Posted by RIA in a Box

Jun 3, 2022 3:20:25 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 release of the RolloverAnalyzer by InvestorCOM and RIA in a Box, the Department of Labor's ("DOL") PTE 2020-02, and the Securities and Exchange Commission proposed rules for environmental, social, and governance ("ESG") investments. 

Here are our top investment adviser compliance articles for
the week of May 27th, 2022:

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    1. Morningstar Launches Analytics Lab: Tech Roundup (Author – Jeff Berman, ThinkAdvisor)

In ThinkAdvisor's latest Tech Roundup, Jeff Berman discusses top innovations, partnerships, and mergers in the wealth management industry. Morningstar's Analytic Lab enables users to discover new opportunities for investing by accessing Morningstar's data and research.

Berman shares the announcement of the partnership between RIA in a Box and InvestorCOM, to release a rollover tool for advisers to comply with the Department of Labor's PTE 2020-02 requirements. The RolloverAnalyzer enables advisers to efficiently streamline the process of making best interest rollover recommendations. 

    2. Riskalyze, RIA in a Box announce new compliance solutions for growing firms (Author – Justin L. Mack, Financial Planning)

Justin Mack provides an overview of two new compliance solutions for advisers. Riskalyze announced the release of a tool to help advisers identify accounts with compliance red flags. RIA in a Box and InvestorCOM joined forces to provide advisers with the RolloverAnalyzer solution to tackle the new compliance requirements set by PTE 2020-02. An industry expert weighs in on the innovations, stating that both offerings are crucial for small, mid-sized and growing firms that need to meet modern regulatory requirements. Automated compliance solutions help firms proactively address issues before it becomes too late to mitigate problems. 

    3. Department of Labor must do more to protect retirement savers from advisor conflicts (Authors – Christine Lazaro Stephen Hall, Financial Planning)

Authors Christine Lazaro and Stephen Hall highlight the objectives of the Department of Labor's PTE 2020-02 and discuss previously adopted rules and regulations aimed at protecting retirement investors. They discuss the importance of the ERISA fiduciary obligations, to prohibit advisers from having conflicts of interest unless the conflicts can be managed so that no harm is done to investors. The article also addresses the loopholes in current regulations and calls for the rules to be strengthened to ensure investors receive the protection they deserve under the law. 

    4. Independence by any path is still independence (Author – Ed Friedman, Investment News)

In this article, Ed Friedman, director of growth and business development at Summit Financial, recalls the path to independence and offers words of wisdom to advisors considering the path. Advisors, and their clients, break away because they value full transparency, the fiduciary standard and conflict-free advice. True independence adheres to these principles. The way an advisor pursues those ideals doesn’t define true independence.

Every path to independence is valid. The problem arises when firms emphatically state that there is only one path to independence. All this creates confusion for advisors who want to understand their options. Faced with so many options, the best thing advisors can do to cut through the noise is educate themselves. No matter their destination, financial advisors need to understand what level of support they need and make sure their partners are up to the task. Read the article further for his personal take on the experience.

    5. SEC’s ESG Proposals Take Aim at Advisor 'Greenwashing' (Author – Patrick Donachie, Wealth Management)

The SEC recently addressed compliance concerns related to ESG investments with risk alerts, guidance, and now a set of proposed rules on ESG disclosure obligations for investment advisers and funds. These rules require advisers to disclose ESG strategies and methodologies in fund prospectuses, annual reports and advisor disclosure documents like Form ADVs. The article points out that amendments to the Form ADV would also require advisers to disclose their approaches to proxy voting and whether they have affiliates that are ESG providers. The public will have a 60-day period to comment on the rule. 

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Don't forget to check out last week's top RIA compliance news articles that focus on the SEC's Marketing Rule, social media marketing tips, regulatory exam focus areas, and the North American Securities Administrators Association's ("NASAA") model rule regarding unpaid arbitration awards.

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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