More On Legal & Compliancefrom The Advisor's Professional Library
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
Three states’ securities divisions—Ohio, Michigan and Vermont—are planning to hold seminars in March to help advisors with the transition from federal to state oversight.
As part of the Dodd-Frank Act, advisors with less than $100 million in assets under management must switch from federal oversight by the Securities and Exchange Commission (SEC) to state oversight. Approximately 4,000 advisors will make the switch by July 21, 2011.
The Vermont Securities Division plans to hold its seminar on March 10; the Ohio Division of Securities has scheduled a March 18 seminar; and the Michigan Securities Division has scheduled two seminars on March 21. The North American Securities Administrators Association’s (NASAA) complete “IA Switch” calendar can be accessed here.
The SEC has penciled in an April to July timeframe in which the agency plans to adopt rules and form changes to implement the transition of mid-sized investment advisors—those between $25 and $100 million in assets under management--from SEC to state regulation, as provided in the Dodd-Frank Act.
David Massey (left), North Carolina’s Deputy Securities Commissioner and president of NASAA, detailed in his recent blog for AdvisorOne, the SEC’s proposed transition schedule for advisors, which the agency released in January.
The SEC’s proposed transition schedule states:
Confirming SEC eligibility: Each IA registered with the SEC on July 21, 2011 will file an amendment to its ADV by August 20, 2011 to report its AUM as determined within 30 days of the amendment filing.
Terminating SEC registration: IAs no longer eligible for SEC registration must file ADV-W by October 19, 2011.