More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
The Department of Labor’s reproposed fiduciary rule will likely be released a “couple months after July,” Phyllis Borzi (left), assistant secretary for DOL’s Employee Benefits Security Administration, said during a Tuesday afternoon meeting with the ERISA Advisory Council.
After pulling the original draft of the rule to amend the definition of fiduciary under the Employee Retirement Income Security Act (ERISA) last year, Borzi and her team had said that a redraft would likely come in July.
A discussion draft was introduced in mid-May by Rep. Ann Wagner, R-Mo., that was intended to stymie efforts by the Securities and Exchange Commission and DOL to move forward in crafting their fiduciary rules, but industry officials said the draft, as currently written, would prove to be of little consequence.
In introducing the discussion draft at a late May hearing titled "Legislative Proposals to Relieve the Red Tape Burden on Investors and Job Creators," Wagner stressed that it was “a discussion draft,” and said that the measure was intended to address “one of the biggest issues facing retail investors today, the fiduciary issue. What we have is the SEC and DOL heading toward massive rulemakings, changing the way American investors choose investments—and not necessarily for the better.”