More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
TD Ameritrade Institutional kicked off its national conference on Thursday morning in San Diego by announcing major new initiatives in three critical areas of interest for advisors: the search for the next generation of advisors; advocacy in Washington for a fiduciary standard, and enhancing its technology offerings to provide more efficiency to RIAs.
TDAI President Tom Nally (left) announced the new programs at the formal opening session of the conference, which TD representatives said had attracted 3,000 attendees who over the course of the three-day conference will hear from Condoleezza Rice, fiscal policy wonks Alan Simpson and Erskine Bowles, and Malcolm Gladwell (though truth be told, there’s at least as much buzz about the entertainment at Friday night’s closing gala: Pat Benatar).
As for the new initiatives:
Support for NexGen: Nally said that since TDAI is “committed to raising the profile of financial planning as a worthwhile career,” beginning this year it will award 10 scholarships worth $5,000 each to students in undergraduate financial planning programs. In addition, TD will separately award a $50,000 grant to a specific university that “best demonstrates a commitment to educating the industry’s future financial professionals.” In prepared remarks before Thursday’s announcement, Nally said that beyond awarding the grant this year, TD believes “competition for this grant among higher education institutions will encourage innovation and support greater investment in financial planning curriculum.”
Jim Dario (right), TDAI’s managing director of product development, said in a separate interview Wednesday that while undergraduate business majors receive training in various related subjects, that financial planning is not one of them. The scholarships and grant, Dario said, is part of an overall strategy to help raise the profile of financial planning students and make the profession appear a more desirable choice for good students, but will also bear benefits for RIA firms in terms of not only succession planning, but in helping advisory firms serve the next generation of investors. Clients, he pointed out, “like to work with people who are like them” in demographics, age and interest.
At its annual conference, TDAI is hosting 30 students from nine different universities and networking events for those students and attending advisors.
Details on how to apply for the scholarships and grant are available at TD’s website.
Advocacy for RIAs: TDAI announced it will host an invitation-only Fiduciary Leadership Summit on June 13 running in conjunction with its annual Elite Advisor conference in Palm Beach, Fla. In his prepared remarks, Nally noted that while “some of the conversations and debate may have temporarily subsided, proposed regulatory actions around improving advisor oversight and the application of a uniform fiduciary standard are not going away and should be addressed proactively.”
I In a separate interview Wednesday, Skip Schweiss (left), TDAI’s managing director of advisor advocacy and industry affairs, said the intent of the summit is to bring together for a half-day a relatively small group of 50 to 75 true leaders from across the advisor industry association and regulatory spectrum to address “how to go forward with a uniform fiduciary standard.” Schweiss anticipates having representatives from the SEC, FINRA, the IAA and the Consumer Federation of America attend, and perhaps a panel of financial services consumers.
Since Schweiss says that a concept release on the fiduciary standard could come from the SEC by early summer, including some guidance in how to conduct a cost-benefit analysis of implementing a fiduciary standard for all advice givers, so the timing of the summit could make it “very interesting.”
iRebal to the Cloud: The third big announcement at the opening general session had to do with a technology offering, specifically making available through its VEO platform a cloud-based version of the iRebal software available for free to advisors who custody with TDAI.
Nally said making the portfolio rebalancing sofwaare available to TDAI RIAs can “help advisors achieve greater scale for their investment management businesses, allowing a wider range of investors to benefit from the services of a financial advisor.”
In an interview Wednesday, TDAI’s Dario noted that making iRebal available to its affiliated advisors reflected TD’s approach of acknowledging “that we don’t have all the answers” when it comes to specific technology tools, but rather the custodian is focused on strategic partnering with other firms who can provide best-of-breed technology in multiple areas that work well on the Veo platform. Dario said that the web-based version of iRebal for TDA advisors is going into beta testing now, with a full rollout planned for summer 2013.