More On Legal & Compliancefrom The Advisor's Professional Library
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
- Proxy Voting RIAs are not required to vote proxies on behalf of their clients. However, when an RIA does assume responsibility for voting proxies, the firm’s policies and procedures should help to ensure that votes are cast in the best interest of clients.
Well, the Obama Administration has come out with its sweeping recommendations "to restore confidence in the of integrity of our financial system" in a massive 85-page white paper. In it the President's team proposes a five-part initiative to increase regulation of virtually every corner of American finance from banks to brokerage firms to insurance, expanding the power of the Federal Reserve, the FDIC, and the SEC, and creating too many new councils and agencies for me to tally up. (You probably don't recall that Herbert Hoover tried the same thing in 1929: It didn't work out so well.)
For the independent advisory world, the most direct impact of the White Paper appears in a single sentence (which is not even in the Summary, you have to read the whole thing to find it), under the third initiative entitled "Protect Consumers and Investors from Financial Abuse." The second point of the third section (on page 14 for those of you who are following along) reads: "The SEC should be given new tools to increase fairness for investors by establishing a fiduciary duty for broker-dealers offering investment advice and harmonizing the regulation of investment advisors and broker-dealers."
To read the rest of Bob's blog, please click here.