From the April 2010 issue of Investment Advisor • Subscribe!

Gaps, the SEC, and CPAs

More On Legal & Compliance

from The Advisor's Professional Library
  • Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
  • Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.”  The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.

Kristina Fausti of Fi360 says that Senator Herb Kohl's amendment calling for a new board to oversee all advice givers, "would create gaps by pulling some investment advisors under the umbrella of a financial planning oversight board while leaving others out. It would also keep current gaps in place with regard to brokers because not all brokers who provide advice will be regulated as financial planning professionals." Also, Fausti says, the proposed amendment "would indirectly bring persons such as CPAs under SEC regulation, creating a gap in the SEC's knowledge and expertise, which is solely focused on investment advice as it relates to securities."

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