More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
Last week ended with two significant developments for the markets and the economy, and for the advisor universe: the May jobs report was disappointing, as job growth (ex the Census Bureau) was weaker than expected; while the biggest independent broker/dealer, LPL Financial, filed for its initial public offering--both on Friday, June 4.
This week begins with the expected naming on June 7 by House Financial Services Committee Chairman Barney Frank of the conference committee that will seek to reconcile the House and Senate versions of financial services reform; two eminences grise of Washington and this specific legislation--David Tittsworth of the Investment Adviser Association and Dan Barry of the Financial Planning Association, provided analysis and guarded predictions in an exclusive Webinar on Thursday, June 3--you can read the news story and download an archived version of the Webinar. In other political news, voters cast ballots in 12 states in primary elections on June 8.
The Federal Reserve and its leader is busy this week. On Monday, June 7, the Fed releases its consumer credit numbers for April and its beige book on Wednesday, June 8, while Chairman Bernanke delivers a state of the economy testimony on June 8 before the House Budget Committee.
With investors and their advisors still waiting for the other shoe(s) to fall in Europe, two of the Fed's European counterparts are scheduled to make interest rate decisions this week: on Thursday, June 10, both the Bank of England and the European Central Bank are due to announce. That same day, Portugal is expected to vote on an austerity budget. An interesting column by Jack Ewing called Debtors' Prism in the June 6 New York Times explored the difficulty in discovering just which institutions and individuals hold European sovereign debt. Meanwhile, on June 8, the trial of rogue trader Jerome Kerviel opens in Paris.
As for other events of interest to advisors, the annual Pershing INSITE conference runs June 9-11. Sheer self-interest leads this writer (and occasional moderator) to suggest that a session on Wednesday at 4:00 featuring Mark Tibergien, Kim Dellarocca, and Jim Dario will be the conference's highlights; others might suggest that Hank Paulson or David Gergen earlier that day, Research Magazine columnist and academic Moshe Milevsky's speech on June 10, or Jeremy Siegel's presentation on June 11 would be interesting as well--look for blog postings by Investment Advisor Group's John Sullivan during the conference, and onsite news coverage by the IAG team.
Friday, June 11, brings reports on retail sales from the Commerce Dept., and the University of Michigan/Reuters consumer confidence index, though for most of the world, June 11 marks a much more august beginning: that of the 32-nation World Cup in South Africa.