More On Legal & Compliancefrom The Advisor's Professional Library
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
"People on the Hill know what financial planning is now," says Tom Potts, president of the Financial Planning Association (FPA), and while it may "take a while" to get everything that financial planners want in Washington, "we're laying the foundation for the future." Potts was speaking in San Antonio on April 23, during the annual FPA retreat, where he and the leaders of the other organizations in the Coalition for Financial Planning presented a status report to attendees on the Coalition's efforts in Washington.
One of those groups is the Certified Financial Planner Board of Standards, whose board's immediate past director, Marilyn Capelli Dimitroff, said during the session that "all of our organizations are so committed to establishing financial planning as a profession" to the point that "we've drafted a Financial Planners Act of 2010." While admitting that "our chances are slim" of getting the Coalition's needs met this time, referring specifically to the current text of Senator Chris Dodd's financial services reform bill, she stressed that "Herb Kohl is our champion," referring to the Democratic senator from Wisconsin, and that he will "offer his amendment when it's appropriate" during debate on the Dodd bill. That amendment was to have created an independent oversight board to regulate financial planners ; during markup of the bill in the Senate Banking Committee in late March, the language was changed to call instead for a General Accounting Office study of the regulation of financial planners .
Speaking of the Coalition's progress, however, Capelli Dimitroff said "our people have met with all 23 of the Senators on the banking committee," echoing Potts's earlier statement that the staff of the three groups in the Coalition--the FPA, the CFP Board, and NAPFA--"meet almost daily" on the Coalition's business, while the "volunteers," indicating the elected leadership of the three groups, "speak to each other weekly."
Bill Baldwin, one of those "volunteers" who serves as the current chairman of NAPFA, thanked several staff members for their work, specifically Dan Barry of FPA, Nancy Hradsky of NAPFA, and Marilyn Mohrman-Gillis of the CFP Board.
Mohrman-Gillis told attendees at the session to expect an "action alert" e-mail soon from their groups that would include a link through which "literally, it's three clicks" for group members to contact their Congressmen on the Kohl amendment and the Coalition's requests.
Responding to a comment from the audience telling of The American College's lobbying against extending a fiduciary duty to all advice givers, Capelli Dimitroff acknowledged that "we are up against" some powerful, wealthy organizations that "don't want change" and instead "like the ambiguity."