More On Legal & Compliancefrom The Advisor's Professional Library
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
The National Association of Personal Financial Advisors (NAPFA) announced at its annual meeting, beginning May 14 in Long Beach, California, that it had achieved several milestones in its 25th year of existence, and announced that its board had elected Diahann Lassus of Lassus Wherley in New Providence, New Jersey, as its next chair, succeeding Tom Orecchio. At the meeting, CEO Ellen Turf announced that membership in the fee-only group had reached 2,008--of whom 1,233 were NAPFA-registered advisors--that the group's budget was over $4 million, and that 46 study groups (which act like local chapters) were active across the country. Conference chair John Ritter noted that the gathering was the biggest-ever NAPFA national show, with 545 advisor attendees and 145 exhibitors.
As for the group's priorities on the regulatory front, Lassus and Ron Rhoades of NAPFA's industry issues committee ticked off the Rand Report at the SEC, senior investor protection, enhanced disclosure, particularly with the summary mutual fund prospectus, principal trading, and the growth of dually registered advisors. "The SEC," charged Lassus, "continues to focus more on Wall Street than Main Street." While in response to a question on the group's influence in Washington, Rhoades said "no one's ever comfortable with their lobbying clout," Lassus believes that "the SEC listens" to NAPFA.