More On Legal & Compliancefrom The Advisor's Professional Library
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
The word “sequester” might be on many Americans’ minds, but for advisors, “fiduciary” is the elephant issue inside the beltway. As the SEC and the Department of Labor consider their separate rulemakings on the fiduciary issue, AdvisorOne is partnering with fi360 to gauge the attitudes and real-world practices of advisors of all kinds when it comes to the fiduciary standard.
The 2013 Fiduciary Survey can be taken here, and all advisors, regardless of business or compensation model, are urged to make their voices heard on the fiduciary standard, whether in the area of retirement planning (the DOL) or in more general financial planning advice (the SEC).
The survey is open now and will remain available through the end of March 2013. Respondents can maintain their anonymity in taking the survey, but the findings in aggregate will help inform the discussion on this crucial topic.
AdvisorOne’s Melanie Waddell has kept her ear to the ground on the progress of both bodies on the fiduciary issue.
Melanie reported that acting SEC Chairwoman Elisse Walter (right) testified before the Senate Banking Committee that the commission was “giving serious consideration” to its proposed rule to put brokers under a fiduciary mandate, the study of which was mandated under the Dodd-Frank Act, Section 913. She also confirmed previous reports that the agency will move forward with a request for public input on the rule. The response to Walter’s Feb. 14 testimony from Sen. John Tester, D-Mont.: "I think this [rulemaking] should be a priority because it is a benefit to investors. You should push it."
As for Phyllis Borzi and the DOL’s redefinition of fiduciary under ERISA, in Investment Advisor’s cover story for March 2013, Borzi reiterated that the new version of the Department’s fiduciary rule will prove the Employee Benefits Security Administration has listened to industry concerns over its proposed rule. “When people see the reproposal, reasonable people with open minds will say DOL listened, that DOL addressed the legitimate issues that were raised in the long comment process,” Borzi said again. “The reproposal will be better, clearer, more targeted and more reasonably balanced.”
Since a “concept release” on the fiduciary standard could come from the SEC by early summer, while the DOL fiduciary redraft is scheduled to be released in July, now is the time for advisors’ unfiltered voices to be heard on the subject by taking the 2013 Fiduciary Survey.