More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Pay-to-Play Rule Violating the pay-to-play rule can result in serious consequences, and RIAs should adopt robust policies and procedures to prevent and detect contributions made to influence the selection of the firm by a government entity.
The leadership of the Financial Services Institute (FSI) threw down the gauntlet in front of legislators and regulators at its OneVoice annual meeting in New Orleans January 25-27, saying it would focus its "effective political advocacy," in the words of new FSI chair Mari Buechner, on the regulatory reform now in Congress, fighting for continuance of 12b-1 fees, and preserving B/D reps' independent contractor status. Now in its sixth year of existence, FSI national conference chair Tim Murphy, CEO of Investors Capital, noted that there were 514 attendees in 2010, representing a 10% increase.
Buechner argued that the group has "earned credibility for our business model" in its advocacy efforts, to the point that "today we have a seat at the table with SEC, FINRA, the states, and Congress," and that independent financial advisors "now represent 43% of all advisors," according to Cerulli Associates.
Buechner's attendance reflects the growing influence of smaller-firm broker/dealers, which Buechner said now represent 20% of all FSI membership. In an interview, outgoing Chair Eric Schwartz of Cambridge Investment Research noted that a dozen such small firms joined FSI during his tenure as chair, and that FSI effectively now represents the entire independent B/D community.
CEO Dale Brown, the single person most responsible for FSI's efficacy and growing influence in a remarkably short time, noted in a speech in the opening session that FSI's priorities include continued robust participation in FINRA governance; being "constructively engaged" in the regulatory and legislative process, and in educating policy makers, citing as a particular triumph "making sure" that any consumer financial protection agency "does not oversee independent broker/dealers and RIAs. "Congress," B Brown said, "is the key to long-term change," and it's more important than ever" for FSI to use its hard-won credibility in influencing those issues of importance to its members.