More On Legal & Compliancefrom The Advisor's Professional Library
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
The Federal Reserve Board cut the Fed Funds rate by 75 basis points to 3 1/2% on January 22 before the U.S. markets opened. The cut came after international markets plunged on January 21 and 22, and amid widespread concerns over a potential recession in the United States and abroad.
In its statement accompanying the move, the Fed says it made the extraordinary cut, outside of its regular Federal Open Market Committee (FOMC) meeting, which is scheduled to be held January 29-30, because of the "weakening of economic outlook and downside risks to growth." On December 11, the FOMC lowered its target for the Fed Funds rate 25 bps to 4.25%.
The Fed Board of Governors announced January 22 that it had also approved a 75 bps decrease in the discount rate to 4%.