More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- 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.
Aikin was referring to the firm’s announcement last Thursday that it had acquired IPSAdvisorPro from Norman Boone and Linda Lubitz.
“An investment policy statement is certainly among the most important aspects of a fiduciary relationship,” he added. “We looked at the way their offering would work with ours, specifically from a technology and compliance standpoint.”
Aikin said that both Boone and Lubitz would continue to serve as consultants to the firm as new software offerings are developed and released.
“They’ll also take a fresh look at what we do overall at fi360,” Aikin explained. “Having their expertise and perspective will be very valuable.”
His challenge in the short run, he says, is to make people aware of this added capability.
“IPSAdvisorPro is superior to our IPS generation capabilities, so this will be wrapped into our offering, although they’ll be available as standalones as well.”
The name fi360 stands for Fiduciary Insight. The firm sponsors the accredited investment fiduciary (AIF) and accredited investment fiduciary analyst (AIFA) designations.
As for the fiduciary issue overall, “it’s a very uncertain future for formal regulatory action on the issue," Aikin said, "However, the good news is that there are positive changes in the competitive landscape that are overwhelming any regulatory action, meaning more advisors are acting in a fiduciary manner, anyway.”
The firm now counts 6,500 AIFs and AIFAs, he added, and “growth continues to be strong.” He argued that confusion still exists among the public about who has fiduciary responsibility and who doesn’t, but Aiken feels it’s almost better that firms are taking a bottom-up business approach to the issue rather one that’s top-down from a regulatory standpoint.
“It’s really about how you position your own practice,” he concluded. “We’re seeing more firms adopt a fiduciary standard. Even though the rule didn’t go through, the spirit did. The worst thing would be some watered-down version of a bill that seeks middle ground.”
Check out Fi360 Acquires Flagship Fiduciary Tool IPSAdvisorPro on ThinkAdvisor.