RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of May 3rd, 2019

Posted by RIA in a Box

May 10, 2019 11:53:59 PM

SEC Robare case use of the word may in Form ADV

Each 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 importance of cybersecurity, progress of the Securities and Exchanges Commission's ("SEC") Regulation Best Interest ("Reg BI") proposal, and digital marketing strategies for advisors. Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of May 3rd, 2019:

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1. The Cybersecurity Defense Advisors Forget  (Author- Jessica Mathews, FinancialPlanning)

Despite the rise in cybersecurity awareness, firms and advisors are still overlooking the most important and most vulnerable group – their people. It turns out that when a hacker zeroes in on a victim, they will go for the human employees first. This is due to the likelihood of human error and how trusting we can be. According to John Sileo, CEO of Sileo Group, a data security think tank, “We’ve got to train our people to have a moment of skepticism – when they slow down, ask some questions and think through this.”

2. Advisors Risk All If They Don’t Wise Up To Cyber Risks  (Author- Christopher Robbins, Financial Advisor Magazine)

It is easy to sit there and say “this would never happen to me”, but John Sileo of Sileo Group believes that is when you are most vulnerable to cyber-attacks. Sileo says, “I have learned through experience what brain scientists have learned over and over again: that knowledge alone, our awareness of these threats, does not create the change. Only our emotions do. Our personal connection to how this is relevant to the most important pieces of our lives.”  And these hackers and cyber criminals are only getting smarter. From posing as IRS agents to using AI to mine social media accounts, their efforts are relentless. Now is the time to prioritize cybersecurity more than ever before.

3. SEC Commissioner Hester Peirce says Reg BI is Stronger Than Fiduciary Duty (Author-Mark Schoeff Jr. , InvestmentNews)

It seems we may have a final version of Reg BI and the rest of the SEC proposal sooner than expected. With the reform proposal being released more than a year ago, many had expected a final version by the end of the summer. There has push back on Reg BI, with many stating that the regulations have missed the mark. However, according to SEC commissioner Hester Peirce, “When you lay it side-to-side against the fiduciary standard, I think one could argue that it’s a stronger standard because it does require mitigation or elimination of conflicts in a way the fiduciary standard does not.”

 4.  Massachusetts One-Page Fee Disclosure Mandate Moves Closer to Reality  (Author- Tracey Longo, Financial Advisor Magazine)

This move to a mandatory one-page cost and fees disclosure form in the state of Massachusetts is highly influenced by the European Union’s (“EU”) now requiring a similar document from their advisors. The Institute for the Fiduciary Standard told Massachusetts regulators, “giving investors information they need to understand what an advisor will charge them is critical to their ability to protect themselves and comparison shop advisors.”

5. Making Marketing Lemonade out of SEC Testimonial Rule Lemons  (Author- John T. Jones, ThinkAdvisor)

As a result of the SEC’s (“SEC”) Testimonial Rule, many advisors are not sure how to successfully market themselves outside of word-of-mouth traditional print advertising. John T. Jones outlines several approaches to digital marketing that are still in line with the SEC Testimonial Rule. Jones says, “A strong marketing tool that advisors can use to their advantage is hiring a writer to get their verbal or loosely written ideas on paper to post regular, informative blogs. These postings can be published and advertised on social media sites, drawing traffic back to the advisor’s website.”

Download our 3 Elements of Cybersecurity Infographic

Don't forget to check out last week's top RIA compliance news articles focusing on the SEC Reg BI proposal, malware attacks, and the importance of Form ADV disclosures. Be sure to check back next Friday for next week’s top articles! 


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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