More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- 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.
The Committee for the Fiduciary Standard, which includes WealthManagerWeb.com Editor in Chief Kate McBride, held face-to-face-meetings with two SEC Commissioners, Congressional staffers, and a Treasury Department official on July 29 to discuss the Committee's five fiduciary principles. McBride and fellow Committee members Knut Rostad, Harold Evensky, Sheryl Garrett, Tom Bradley, and others met for more than an hour each with SEC Commissioners Elisse Walter and Luis Aguilar, at the Commissioners' invitations, in SEC headquarters in Washington.
Afterward, committee members also met with staffers from the House Education and Labor Committee, and with a Treasury Department official, over the Committee's call on Congress to include an "authentic fiduciary standard" in any financial services re-regulation promulgated by the Obama Administration.
"The authentic fiduciary standard and five core fiduciary principles have generated a great deal of interest among the regulators and legislators who invited the Committee to these meetings," said McBride.
Evensky, president of the wealth management firm Evensky & Katz in Coral Gables, Florida, noted that "We felt strong interest from everyone we met. Although no specific commitments were made, our takeaway was that all participants understand and believe in the application of the five core fiduciary principles to any and all who provide (or purport to provide) investment advice."
"We saw Washington at its very best," said Rostad, who chairs the Committee. "The keen sense of how critical the fiduciary standard is to regulatory reform, and the historic opportunity to 'Do what's right for investors' was palpable in our meetings." Rostad is regulatory and compliance officer at the Falls Church, Virginia, RIA firm Rembert Pendleton Jackson.
He blogs on the fiduciary issue at Investment Advisor sister publication WealthManagerWeb.com.