RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of October 25th, 2019

Posted by RIA in a Box

Nov 1, 2019 4:13:54 PM

RIA Compliance Regulatory News

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 Commission’s (“SEC”) 2019 performance review, RIAs disclosing conflicts of interest, and the RIA ecosystem.

Here's our top investment adviser compliance articles for the week of October 25th, 2019:    

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1.  Is the SEC up to its $84-trillion RIA challenge? (Author - Tobias Salinger, FinancialPlanning)

Tobias Salinger discusses the inspector general’s findings regarding the SEC's) 2019 performance review and which areas need improvement. According to the review, “The average time it takes the SEC to start an enforcement action after opening an investigation is two years and one month. Only 49% of the time was the agency able to file cases within two years of starting its investigation. The figures came nowhere near the SEC’s own targets.” Salinger goes on to explain, “The agency intended to file an enforcement action within two years of opening an investigation at least 65% of the time. It also took five months longer to begin enforcement proceedings, on average, than its goal for fiscal 2018."

2.  With SEC Doubling Down, Now is the Time to Fix Compensation Conflicts (Author - Tracey Longo, Financial Advisor Magazine)

As the SEC continues to crack down on how advisors run their business, David L. Williams, partner at Drinker Biddle, believes “now is a critical time for firms to evaluate and fix their practices.” The SEC has given fair warning of these check-ins and what they will be looking for, but advisors, specifically dually-registered advisors, are still “not disclosing or eliminating conflicts of interest with regard to their compensation practices”. Williams explains, “Where a conflict exists, an advisor must also disclose how it addresses the conflict, and, as noted previously, an advisor’s fiduciary duties may require it to provide disclosure beyond what is specifically required by Form ADV.

           3. Ron Rhoades’ 18 Predictions for the Future of RIAs (Author - Ron Rhoades, JD, CFP, ThinkAdvisor)

With many changes and new regulations on the horizon, RIAs will need to learn to adapt and understand what to expect. Ron Rhoades, JD, CFP shares his predictions looking into the future of our industry and where he thinks the RIA profession is headed. Rhoades states, “Between the dangers posed by the SEC’s Regulation Best Interest (“Reg BI”) to broker-dealer business models, as well as the substantial increase in consumer’s knowledge of, and demand for, fiduciary advice, the investment advisor profession will continue it's strong growth in the years ahead.

4. Navigating the RIA ecosystem (Author - David Canter, InvestmentNews)

David Canter dives into the RIA ecosystem, how the profession has evolved over the last thirty years, and the other industries that have benefited or have been created because of registered investment advisors. Canter explains what it is like if you wanted to start an RIA today, “the ubiquity of choice across technology, business models, platforms, practice management, client experiences solutions, compliance services, chief operations officer services, and more can be overwhelming. RIAs have endless options in constructing their businesses, which have grown from small lifestyle practices to professionalized, multibillion-dollar enterprises.”

5. RIAs: Are you charging enough? (Author - Jeff Berman, ThinkAdvisor)

“As RIAs work to grow their businesses, they often consider many possible strategies to achieve that goal, but a review of their pricing policies to make sure they’re adequately charging for their services all too often gets overlooked.”, explains Vanessa Oligino, director of business performance solutions at TD Ameritrade. Oligino goes on to discuss the different pricing models that RIAs tend to follow and the pros and cons of each. She also explains how an advisor should go about raising their fees if the need arises, “In many cases, clients are fine with that. If you’re able to articulate the value that you’re providing them and they agree, many people will not even blink at the pricing increase. As long as it’s reasonable.”

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Don't forget to check out last week's top RIA compliance news articles focusing on the SEC's share-class initiative, private funds enforcement, and proposed changes to the whistle-blower program. 


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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