From the April 2010 issue of Investment Advisor • Subscribe!

Gaps, the SEC, and CPAs

More On Legal & Compliance

from 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.    
  • Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not.  Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.

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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