More On Legal & Compliancefrom The Advisor's Professional Library
- Use and Misuse of Social Media Social media is an inexpensive and effective way to communicate with established and prospective clients. Nevertheless, when RIAs utilize social media to promote their advisory practices, they risk compliance problems for their firms.
- Nothing but the Best Execution Along with the many other fiduciary obligations owed by RIAs, firms owe a duty to seek best execution of clients transactions. If they fail to do, RIAs violate Section 206 of the Investment Advisers Act.
House Financial Services Chairman Barney Frank (D-Massachusetts) voted against the Harkin amendment, stating that dual oversight of equity-indexed annuities by the Securities and Exchange Commission (SEC) and the states was the best way to go.
However, Rep. Spencer Bachus (R-Alabama) ranking minority member on the House Financial Services Committee, said that over the last two years the "states did an excellent job of regulating the insurance industry." Regulating EIAs as securities, Bachus argued, would "lead to other insurance policies being classified as securities," like whole life policies. He questioned whether it was wise to put yet another product under the SEC's oversight when the agency is "struggling."
Rep. Scott Garrett (R-New Jersey) concurred with Bachus, stating that the "record shows that the states have regulated these [EIA] products appropriately."