More On Legal & Compliancefrom The Advisor's Professional Library
- Meeting and Exceeding Clients and Regulators’ Expectations Although it can be difficult, there are ways for RIAs to meet or exceed client expectations, increase customer satisfaction, and help firms retain current clients and attract new ones.
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
President Barack Obama signed on Monday a bipartisan bill that repeals the 3% Withholding Tax mandate enacted in the Tax Increase Prevention and Reconciliation Act of 2005.
If it had not been signed into law, on Jan. 1, 2013, the 3% Withholding Tax would have had a negative impact on advisors and their clients that do business with local, state or federal governmental entities.
For a broker-dealer or advisor, the 3% withholding tax could have directly affected an advisor that, for instance, “helps run the local government’s 401(k) plan,” said Chris Paulitz, spokesman for the Financial Services Institute. For clients, if they are “cutting lawns for government buildings, they lose that 3% of their pay throughout the year—money they could [give to] an advisor to invest for them, or to create more jobs in their business.”
Dale Brown, president and CEO of the Financial Services Institute, said in a statement that “businesses that provide services to the government deserve to be paid in full and due upon receipt. They shouldn’t be forced to lose a percentage of their pay they could be investing throughout the year or using to hire additional employees. The withholding tax would have created cash flow problems as well as drained capital that could have been used for job creation and business expansion.”