More On Legal & Compliancefrom The Advisor's Professional Library
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
- 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.
In testimony before the House Financial Services Committee on June 24, Cathy Weatherford, CEO and president of NAVA, the Association for Insured Retirement Solutions, citing the comprehensive regulatory structure composed of the SEC, FINRA, and the 50 individual state regulators, rejected calls for additional regulation of the insurance industry.
"Given the current regulatory protections, adding yet another layer of regulation to the insurance industry is unnecessary," she testified. "Further, separating financial regulation and consumer protection regulation is not prudent and would present significant risks to consumers. It could also prevent the best products from reaching consumers in a timely fashion...In summary, while we do not believe an additional consumer protection regulator is necessary or even advisable for the insurance industry, we ask the Congress to continue to focus on how regulatory structures and necessary consumer protections can be operated and administered in the most effective manner. This is why we support Treasury's proposals to modernize and improve our system of insurance regulation, as well as its six principles for insurance regulation."
Weatherford also reaffirmed NAVA's commitment to the consumer protection principles of transparency, suitable sales and education, and training, noting that the organization urges uniform passage of the current NAIC Suitability, Disclosure and Senior Designation Models as well as the adoption of a summary prospectus by the SEC for annuity purchasers such as has already been adopted for mutual funds.