RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of November 16, 2018

Posted by RIA in a Box

Nov 23, 2018 8:19:55 PM

SEC Form CRS finalized

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 cybersecurity, the importance of a policy around text messaging, and New Jersey's push for its own fiduciary rule. Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of November 16, 2018:

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  1. Building The Five Pillars Of SEC Cybersecurity Requirements As A (Registered) Investment Adviser (Author- Patrick Cleary, Nerd's Eye Vice at

Patrick Cleary, Chief Operations Officer at Alpha Architect, posted a detailed article about "what you need in order to roll out a fairly decent cybersecurity program that attempts to meet all the Securities and Exchange Commissions ("SEC") cybersecurity requirements." He breaks the post down into many sections including: What are the explicit SEC cybersecurity requirement; Fallujah, Iraq - the crown jewel of cybersecurity training!; and Mission: Provide a Comprehensive Cybersecurity Guide that Any Advisor Can Use. To read his detailed breakdown on creating a cybersecurity program in accordance to the SEC's cybersecurity requirements, click here

  1. Why advisors can't ignore text messaging (Author - Mark Mersman, FinancialPlanning)

According to a recent post by Mark Mersman, "Text messaging can offer opportunities for advisors, like quick and efficient communication with clients, but also comes with significant risks. Unauthorized texting can be an expensive violation from regulators, meaning firms are rightfully hesitant." According to the Financial Industry Regulatory Authority ("FINRA") enforcement actions in 2017 there was an, "emergence of a new trend of disciplinary measures and fines against financial advisors who communicate with their clients via unauthorized text messages." Per "SEC Rules 17a-3 and 17a-4 and FINRA Rule 4511," if a firm 'intends to communicate, or permit its associated persons to communicate, with regard to its business' through text messaging, then that firm 'must first ensure that it can retain records of those communications.'" To read more text messaging for advisors, click here

  1. Wall Street Fights Against N.J. Fiduciary Rule (Author- Tracey Longo, Financial Advisor Magazine)

As reported by Tracey Longo, "New Jersey’s push for its own fiduciary rule is turning into a Battle Royale, pitting the nation’s largest Wall Street and broker-dealer associations against comparatively tiny fiduciary advisor and financial planning associations." According to the New Jersey Bureau of Securities, "the state rule is needed because federal regulators have not done enough to elevate broker advice standards, and it wants to 'reduce investor confusion and harmonize regulatory enforcement.'" To read more about NJ's fiduciary rule, click here

  1. Democrats Restructuring House Financial Services Committee (Author- Elizabeth Festa, ThinkAdvisor)

Anticipated new chairwoman of the House Financial Services Committee, Rep. Maxine Waters, D-California, "has already directed committee staffers to sketch out new subcommittees that focus on consumer health, including a tentatively renamed Investor Protection, Entrepreneurship and Capital Markets subcommittee to focus on annuity and fiduciary issues." As reported by Elizabeth Festa, "the Democratic leadership is also considering a new subcommittee called Diversity and Inclusion, which could envelop issues in financial services such as corporate governance and hiring practices." Stay tuned. 

  1. DOL, SEC Flexing Enforcement Muscle Under Trump (Author - Nick Thornton, ThinkAdvisor)

According to Nick Thornton of ThinkAdvisor, "Conventional wisdom would hold that regulators with enforcement jurisdiction over retail and institutional investment markets would loosen their grip under a pro-business, Republican presidential administration. But attorneys with Drinker, Biddle and Reath report that both the Labor Department and Securities and Exchange Commission are leveraging enforcement initiatives at a historic level of tenacity." Per Fred Reish, a partner at Drinker Biddle and DOL fiduciary rule expert, "Now that the fiduciary rule has been terminated, I think the focus at DOL is more on enforcement." 

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Don't forget to check out last week's top RIA compliance news articles on succession planning, changes coming to all 88 local Financial Planning Association entities, and the SEC's Regulation Best Interest proposal. Be sure to check back next Friday for next week’s top articles! 

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..

Topics: RIA Compliance

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