RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of November 23, 2018

Posted by RIA in a Box

Nov 30, 2018 4:30:40 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 the Securities and Exchange Commissions ("SEC") Regulation Best Interest ("Reg BI") Proposal, increased sophistication around phishing scams, and a year-end action list 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 November 23, 2018:

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  1. Best Interest and Best Practices #10 (Author- Fred Reish,

In his 10th article discussing the SEC's Reg BI proposal, Reish discusses, "how the standard applies to specific circumstances" Reish discusses how, "there are three parts to any best interest standard." The first is, "that the advisor engage in a process–carefully, skillfully, diligently and prudently–to develop the recommendation." Part two is, "that the advisor act with loyalty to the investor." The third part is, "that the recommendation appropriately consider the investor’s profile (e.g., the needs and circumstances of the investor)." To read in-depth explanations of each section from Reish, click here

  1. Phishing Scams Getting More Sophisticated, Consultants Warn (Author - Karen Demasters, Financial Advisor Magazine)

As reported by Karen Demasters, "Advisors and RIAs are prime targets for internet 'phishing' schemes." According to Chris Roach, managing director at CBIZ Risk and Advisory Services, phishing was "at first limited to e-mail, it has spread to text messages and Facebook Messenger, as well as telephone calls." Roach additionally said, "Phishing is often the precursor to larger data breaches....It has become so subtle that often the only warning sign is an out-of-place punctuation mark, a grammatical error or a slightly changed e-mail address." To help protect your firm from a data breach, Roach suggests, "awareness training for employees about what to look for and what to do if they receive a scam e-mail or text."

  1. Wall Street Fights Against N.J. Fiduciary Rule (Author- Melanie Waddell, ThinkAdvisor)

According to Melanie Waddell, "News about the Securities and Exchange Commission’s advice standards package as well as the now-defunct Labor Department fiduciary rule (another one is on its way) has been unfolding at a swift pace since last month." Per Waddell's recent conversation with Jay Clayton, SEC Chairman, "that while the commission doesn’t have a 'definitive timeline' on when the agency’s advice package will be finalized, the securities regulator is 'aiming to get them done by September, if not sooner.' " Clayton also confirmed there will be changes to Reg BI and the Form Customer Relationship Summary ("CRS")

  1. Advisors' disciplinary records could disappear from CFP Board website (Author- Kenneth Corbin, FinancialPlanning)

As reported by Kenneth Corbin, "In a bid to overhaul its disciplinary process, the CFP Board has proposed changes to its rules that would, among other things, apply a statute of limitations for most planner infractions and allow the record of certain punishments to disappear from the board's website after a period of time." According to Corbin, "One of the biggest areas of concern has been around expanded fiduciary obligations, in which CFP professionals will be expected to adhere to the board's requirement at all times when they are providing financial advice, a step up from the current standard that imposes fiduciary obligations only when providing planning services." Public comments are being accepted by the CFP Board on the proposal through January 19th. To read more about the topic, click here

  1. Just Do It: A 2018 Year-End Action List for Advisors (Author - Dan Skiles, ThinkAdvisor)

Dan Skiles provides us with a must-do end of the year checklist, "to help advisors tackle business processes and client needs in late 2018." Some of the items included on his list are:  review and audit the permissions for all your systems, make sure that back-ups and redundancy procedures work correctly, limit technology environment changes, and be aware of all partner and provider deadlines because not everyone has a 12/31 year end date. To read more of the suggestions from Skiles, click here.  

Download Our Free RIA Wire Fraud Prevention Checklist

Don't forget to check out last week's top RIA compliance news articles on cyber security, the importance of a policy around text messaging, and New Jersey's push for its own fiduciary rule. 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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