From the February 2010 issue of Investment Advisor • Subscribe!

February 1, 2010

GroupThink

More On Legal & Compliance

from The Advisor's Professional Library
  • Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firm’s policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
  • Books and Records Rule Thorough and complete books and records enable RIAs to demonstrate that they have fulfilled their fiduciary obligations to clients and complied with applicable rules and regulations.

? At the 2010 Investment Management Consultants Association (IMCA) New York Consultants Conference on January 10, IMCA introduced its new president, John Granzow, who began a two-year term on January 1. He is managing director of investments at Wells Fargo Advisors, LLC, in Charlotte, North Carolina. In addition, IMCA announced that Sean Walters will be its new executive director, when Edythe (Dede) Pahl retires on March 1. Pahl announced her plan to retire last summer. Walters has been IMCA's deputy executive director since June 2007.

? The Securities and Exchange Commission (SEC) has appointed Carlo V. di Florio as director of the agency's embattled Office of Compliance Inspections and Examinations (OCIE). OCIE, formerly headed by Lori Richards, received a lot of scrutiny from Congress and the industry for failing to detect the Bernie Madoff Ponzi scheme. As head of OCIE, di Florio will oversee the SEC's nationwide examination programs for investment advisors, broker/dealers, mutual funds, credit rating agencies, and self-regulatory organizations among other entities.

? The SEC also adopted December 16 custody rules that would require advisors who have custody of clients' assets to submit to annual surprise examinations by outside auditors. The new rules, the SEC says, "provide safeguards where there is a heightened potential for fraud or theft of client assets." According to the SEC, the rules "promote independent custody and require the use of independent public accountants as third-party monitors. Depending on the investment adviser's custody arrangement, the rules would require the adviser to be subject to a surprise exam and custody controls review that are generally not required under existing rules."

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