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.
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
Senator Herb Kohl's (D-Wisconsin) amendment to the financial services reform bill that would create an independent oversight board to regulate financial planners will not be introduced as a separate amendment during mark-up of the bill today, March 22. Rather, a manager's amendment will include a provision calling for a GAO study of the issue.
Senator Christopher Dodd (D-Connecticut), chairman of the Senate Banking Committee, is attempting to get his financial services reform bill, which he released on March 15, completed quickly, and is therefore not including controversial amendments that could isolate Republicans on the committee, sources say. Published reports indicate that Republican Senator Bob Corker (R-Tennessee) has said that the Senate Banking Committee would likely approve the bill today, Monday, March 22, with only Democratic votes. Corker said he envisions a full Senate vote after the two-week Easter break, which starts on March 26.
A GAO study of whether to regulate financial planners "makes sense," sources say, because House Financial Services Committee Chairman Barney Frank's financial services reform bill, the Wall Street Reform and Consumer Protection Act (H.R. 4173), which was passed last December, also calls for a similar study.
Groups like the Investment Adviser Association (IAA) opposed Kohl's amendment, arguing it would have placed more regulation on investment advisors who are already regulated and abide by a fiduciary standard. As for the GAO study, Neil Simon, VP for Government Relations at IAA, says "it is entirely appropriate to study whether financial planning should be regulated as a distinct financial service provider, and, if so, how it should be regulated." Clearly, he adds, "there have been abuses involving persons who are not regulated under state or federal law who, [unlike] investment advisors, are [not] subject to a fiduciary standard."