More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
Some of the major players in the fiduciary debate may have changed, and it might appear that the debate itself has taken a back seat to other pressing problems in Washington, but make no mistake: both the SEC and the Department of Labor remain on track to make separate rules on the fiduciary issue.
To ensure that all advisors’ voices are heard in the debate, AdvisorOne is once again partnering with fi360 to gauge the attitudes and real-world practices of advisors of all kinds when it comes to the fiduciary standard.
The survey is open now and will remain available through the end of this week. Respondents can maintain their anonymity in taking the survey, but the findings in aggregate will help inform the discussion on this crucial topic.
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).
As for recent developments in the debate, noted advisor Harold Evensky on March 8 sent a comment letter to the SEC saying that the “Achilles' Heel” of the current regulatory system is “the public’s belief that all professionals providing investment advice place the client’s best interest first, coupled with an inappropriate allocation of responsibility; i.e., ‘where the buck stops.”’ Evensky was writing in response to the SEC’s March 1 request for data regarding the costs and benefits of the current standards of conduct for broker-dealers and advisors.
The SEC request seeks “in particular quantitative data and economic analysis, relating to the benefits and costs that could result from various alternative approaches regarding the standards of conduct and other obligations of broker-dealers and investment advisers.”
Days afterward, SEC chairwoman nominee Mary Jo White (left) told the Senate banking committee that, if confirmed, she would commit to reviewing the comments the agency receives on its request issued March 1 for public data on the “potential regulatory costs to implement potential changes to fiduciary standards for broker/dealers and investment advisors” before writing a rule, as “this is an important area.” White's nomination was approved by the committee on March 19.
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.