More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
Senators Daniel Akaka (D-Hawaii) and Robert Menendez (D-New Jersey) plan to introduce on Thursday, May 6, their amendment to Senator Chris Dodd's financial services reform bill requiring brokers to adhere to a fiduciary duty
The expected introduction, confirmed by two industry sources with knowledge of the Senators' plans, came as that body continued debating the financial services reform bill on May 6, with the main focus centering on the Consumer Financial Protection Agency. Since the Senate began debating the bill on May 3, 100 amendments have been introduced but only two have been debated.
Senate Banking Committee Chairman Christopher Dodd (D-Connecticut), said in his speech on the Senate floor on May 6 that the legislation "before the Senate creates an independent consumer protection bureau. That word--independent--is important. We have seen that when an agency has consumer protection added to a portfolio already stocked with other objectives, consumer protection falls by the wayside. We know this to be true, because there are currently seven agencies tasked with consumer protection, not one of which did the job to anyone's satisfaction in the lead up to the crisis."
Dodd went on to detail how the consumer agency, under the legislation, would "have an independent director, appointed by the President and confirmed by the Senate. It will have a dedicated and independent budget, paid by the Federal Reserve Board. It will have a new Office of Financial Literacy to ensure that consumers are able to understand the products and services they're being offered, and a national toll-free consumer complaint hotline so that Americans have somewhere to go when they need to report a problem. And...it will be empowered to write consumer protection rules governing any institution--whether it's a bank or a payday lender--that offers consumer financial services or products."