More On Legal & Compliancefrom The Advisor's Professional Library
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
In response to the SEC’s decision to proceed with a uniform fiduciary standard, Envestnet Inc. has aligned itself in favor of the decision, saying it presents advisors with an opportunity to show clients that they adhere to high standards of care.
The new report “reflects the profound opportunity before advisors who adhere to a clear fiduciary standard of care," said James Patrick (left), Envestnet's managing director for Advisor Managed Programs, in a statement. “Advisors who enhance their practices and more visibly align with the best interests of clients can solidify relationships, broaden their appeal to investors and deliver more comprehensive services.”
The Securities and Exchange Commission on Friday released its study mandated under Section 913 of the Dodd-Frank Act and told Congress that it would move forward in creating a new uniform fiduciary standard of care for broker-dealers and investment advisors when providing advice to retail customers.
The SEC said in its report that it recommends “the consideration of rulemakings that would apply expressly and uniformly to both broker-dealers and investment advisers, when providing personalized investment advice about securities to retail customers, a fiduciary standard no less stringent than currently applied to investment advisers” under the Investment Adviser Act of 1940.
Headquartered in Chicago, Envestnet is a provider of investment and practice management solutions for financial advisors. The firm has more than $126 billion in total assets served and more than 860,000 investor accounts.
Envestnet’s fiduciary support solutions and resources for advisors include:
- Envestnet Advisor Suite, an integrated set of solutions that helps advisors act in the best interests of clients by planning and documenting activities;
- Fiduciary Oversight Notes, recently added to the Envestnet Advisor Suite, which allows advisors to enter explanatory notes any time a change is made to a client's account, helping to make oversight more transparent and compliant;
- Unified Managed Household Capabilities that enable advisors to view all of a client's financial accounts across multiple custodians.