More On Legal & Compliancefrom The Advisor's Professional Library
- Pay-to-Play Rule Violating the pay-to-play rule can result in serious consequences, and RIAs should adopt robust policies and procedures to prevent and detect contributions made to influence the selection of the firm by a government entity.
- 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.
Four industry groups have joined the Committee in sponsoring the Public Policy Forum: the Certified Financial Planner Board of Standards, Financial Planning Association, Financial Services Institute and National Association of Personal Financial Planners.
"We seek to offer the SEC the very best research-based analysis and independent thinking on how to apply the fiduciary standard in a brokerage setting unconditionally; such that the client is guaranteed his interests remain ahead of the advisor's, irrespective of the compensation method, business model or, frankly, his or her own sophistication. All investors must be treated equally before the law," Knut A. Rostad, chairman of the Committee for the Fiduciary Standard, told Wealth Manager. (This editor is a member of the Committee.)
The Forum, according to a news release on Wednesday, August 11, will discuss white papers gathered in a "Call for Papers" by the Boston University Review of Banking & Financial Law and the Committee. Academics and practitioners are invited to submit papers of 1,250 to 4,000 words by August 31. Selected papers will be published in the Review, featured at the forum and/or presented to the SEC.
Two leading lights in fiduciary thought, Professors Tamar Frankel, of Boston University, and Arthur Laby, from Rutgers University, are among the invited speakers at the forum.
"On the heels of the financial crisis, this is the first major review with prospective rulemaking on the responsibilities of brokers and advisors in 70 years," stated Rostad in the news release. "To say it's important to investors and the capital markets is an understatement."
Comments? Please send them to firstname.lastname@example.org. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.