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An overlooked compliance danger

As RIAs go through their policies and procedures to make sure they’re meeting ever-tightening compliance regulations, they may be overlooking a high-risk area — their employees, according to a column at InvestmentNews. Charles Steerman of Compliance Science lists some “people” danger areas, including vetting in the recruiting and hiring process. See the link below. Also, Finra will be checking on firms to make sure their “best-interest contract” jibes with the retirement advice they’re giving clients, according to Reuters. Richard Ketchum, Finra’s chairman, made those comments at the Reuters Global Wealth Summit, while also saying that Finra doesn’t have the authority to enforce the DOL’s fiduciary rule. See the article below.


The greatest risk to RIAs that’s not in their portfolios

By Charles Steerman                                      Source: InvestmentNews

Registered investment advisers face stringent regulations to make sure they are not engaging in risky behavior such as conflicts of interest, cybersecurity and other governance, risk and compliance issues. And it is getting worse. The Securities and Exchange Commission is planning to increase the number of RIA examiners by 20% in 2016 in a bid to create more oversight for the rapidly growing industry. Within the next 10 years, 8,500 SEC-registered advisers with $24 trillion in assets under management are projected to grow to 12,000 advisers with $65 trillion in AUM in fiscal 2016, according to the SEC. That is a lot of people to ensure are acting compliant and in the best interests of their clients.

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FINRA to Review ‘Best Interest’ Disclosures

By Suzanne Barlyn and Ross Kerber                         Source: Reuters

Wall Street’s industry-funded watchdog will evaluate disclosures of securities firms in light of a new U.S. Labor Department retirement advice rule requiring them to act in customers’ best interests, the regulator’s chief said on Thursday. The Financial Industry Regulatory Authority will look at whether actions by securities brokers who give retirement advice are in synch with what they tell clients in so-called “best-interest contracts” required by the Labor Department rule, said Richard Ketchum, FINRA chairman and chief executive.

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