More On Legal & Compliancefrom The Advisor's Professional Library
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.” The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.
The Self-Regulatory Organization for Independent Investment Advisers, which was founded by two University of Mississippi School of Law students last March, announced Wednesday that it had created a web tool to help advisors wade through the registration requirements for each state.
The Dodd-Frank Act requires investment advisors with assets under management of between $25 million and $100 million to switch from federal to state registration by mid-2012.
In anticipation of the "switching" of advisors, the web tool allows advisors to click on a state to find a summary of the state’s registration requirements and links to the necessary forms. “Prior to the release of the web tool, independent investment advisors would have to search through each state’s complex statutes and securities acts to find the registration information,” said Adam Hynick, VP of state affairs & outreach at SROIIA, in a statement announcing the web tool.
D. Tyler Roberts, co-chief executive officer and co-founder of SROIIA, told AdvisorOne that while SROIIA has “no intentions of becoming a compliance firm, SROIIA is developing a SRO model for advisors,” and “one aspect of SROIIA’s model is its dedication to helping advisors stay compliant, instead of simply writing the rules and enforcing them.”
Roberts says he and other SROIIA execs were researching state registration requirements and processes for use in SROIIA’s own registration model and “found that the information was difficult to locate and wade through.” After compiling the information, he says, “we thought that it may be beneficial for advisors to have access to this information for compliance” and developed the web tool.
“We suspect that there will be other tools like this to follow as we continue to develop our SRO model,” Roberts adds.
FPPad.com, a technology consulting firm to investment advisors, tested SROIIA’s beta version of its web tool, Roberts says, but SROIIA built the tool in-house.
Skip Schweiss, managing director of advisor advocacy and industry affairs at TD Ameritrade Institutional, added in SROIIA’s statement that “Advisors are always
As for an SRO for advisors, a new draft of House Financial Services Committee Chairman Rep. Spencer Bachus’ bill calling for an SRO for advisors–with the primary candidate being the Financial Industry Regulatory Authority–will not be introduced until spring.
At its launch, SROIIA said that it would be an SRO for advisors that will require that members adhere to what it calls the “bona fide” fiduciary standard, and would be an alternative to FINRA as an SRO.
SROIIA, Roberts told AdvisorOne, does “not actively lobby in favor of a SRO; rather, we will be prepared with a complete SRO model that will pass SEC requirements when/if a bill is passed.”