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.
- 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.
Just five months after outsourcing its lobbying efforts in Washington to The Raben Group, the Financial Planning Association is “well under way” in putting its advocacy infrastructure in place, FPA President Michael Branham told AdvisorOne in an interview Thursday.
While the Securities and Exchange Commission’s fiduciary rule and pushing user fees to fund proper SEC oversight of advisors are two of the top advocacy issues for the FPA, and the Financial Planning Coalition, this year, says Branham, the FPA’s longer-term “advocacy infrastructure and strategy will be unveiled in the coming months.”
FPA, as part of the coalition—which also includes the CFP Board and the National Association of Personal Financial Advisors—is also anticipating the Department of Labor’s release of its fiduciary reproposal in July.
While the SEC’s fiduciary rulemaking “has taken most of our time and effort over the past two years since Dodd-Frank came out,” Branham says, “I think we would be remiss to ignore the DOL piece and how that fits into the game.” Once the DOL proposal is released, “we’ll be looking pretty closely at what level that standard differs from the SEC’s and how do you reconcile the two.”
As to user fees, now that Rep. Maxine Waters, D-Calif., ranking member on the House Financial Services Committee, has reintroduced her bill that would allow the SEC to collect user fees to fund advisor exams, Daniel Penchina, principal at The Raben Group, told AdvisorOne during the Thursday interview that the coalition and other planning groups are seeking a Senate sponsor to back a companion user fees bill.
“We’re hopeful that we’ll find a champion in the Senate who’ll introduce a companion bill in the near future,” Penchina said.
Despite reports to the contrary, FINRA’s push for its own plan to boost advisor exams—making itself advisors’ self-regulatory organization (SRO)—is not over. “My impression is that FINRA is still talking to the Hill in support of their regulatory approach,” Penchina says.
House Financial Services Committee Chairman Spencer Bachus’ bill calling for an SRO to oversee advisors died in committee last year, and FINRA CEO Richard Ketchum told AdvisorOne in a recent email exchange that FINRA was “not pursuing legislation in either the House or Senate at this time” on another SRO bill.
Penchina says that the coalition is planning to meet soon with the new House Financial Services Committee chairman, Rep. Jeb Hensarling, R-Texas, to discuss the user fees bill, and with other committee members “to express our support for [Waters’] bill and ask them to co-sponsor it.”
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