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- Nothing but the Best Execution Along with the many other fiduciary obligations owed by RIAs, firms owe a duty to seek best execution of clients transactions. If they fail to do, RIAs violate Section 206 of the Investment Advisers Act.
- 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 Financial Industry Regulatory Authority announced Tuesday that it has created a new Investor Issues Committee to advise FINRA on matters that “significantly affect individual and institutional investors.”
FINRA also announced the same day that it has named two new public governors — Dr. Brigitte C. Madrian and Dr. Luis M. Viceira — to its Board of Governors.
FINRA’s newly created Investor Issues Committee —which includes former SEC Chairwoman Elisse Walter as well as Barbara Roper, director of investor protection at the Consumer Federation of America — will become active in January and will advise senior FINRA staffers on proposed rulemaking, policy initiatives and other issues that FINRA says “significantly impact both retail and institutional investors.”
The Committee will also help inform FINRA’s economic analysis “from the perspective of investors.”
Investor Issues Committee members will include:
Brandon Becker, Executive Vice President and Chief Legal Officer, TIAA-CREF;
James Choi, Associate Professor of Finance, Yale School of Management;
Roger Ganser, Chairman, BetterInvesting; Founder and Managing Director, Venture Investors LLC
Lawrence Greenberg, Chief Legal Officer, The Motley Fool;
Catherine L. Heron, former Senior Vice President and Senior Counsel, Fund Business Management Group, Capital Research and Management Company;
Mark Ready, Department Chair for Finance, Investments and Banking & Academic Director of the Hawk Center for Applied Security Analysis, University of Wisconsin School of Business;
Barbara Roper, Director of Investor Protection, Consumer Federation of America;
Paul F. Roye, Senior Vice President, Fund Business Management Group, Capital Research and Management Company;
Nancy M. Smith, Corporate Secretary and Chief Integration Officer, AARP;
Elisse Walter, former Chairman, U.S. Securities and Exchange Commission; and
Stephen L. Williams, former Senior Special Advisor to the Director, Trading and Markets, U.S. Securities and Exchange Commission.
Madrian, the Aetna Professor of Public Policy and Corporate Management at the Harvard Kennedy School, and Dr. Viceira, the George E. Bates Professor at the Harvard Business School, will join the board in January.
Governors are appointed or elected to three-year terms and may not serve more than two consecutive terms.
Madrian’s current research focuses on behavioral economics and household finance, with a particular focus on household saving and investment behavior. Her work in this area has impacted the design of employer-sponsored savings plans in the U.S. and has influenced pension reform legislation both in the U.S. and abroad, FINRA says.
Viceira is an award-winning researcher interested in the study of asset allocation strategies for long-term investors, both individuals and institutions, capital markets, with an emphasis on the Treasury bond market and the term structure of interest rates, and household finance. He is the author of numerous Harvard Business School case studies on the management and organization of institutional investors.
Richard Ketchum, FINRA chairman and CEO, said in a statement that “Brigitte’s expertise in behavioral economics and Luis’ focus on asset allocation and capital markets will bring valuable perspectives to FINRA’s Board as we pursue our mission to protect investors and ensure market integrity.”
Ketchum added that he was “eager to work with our new Investor Issues Committee, which will help FINRA better understand the needs and protect the interests of the investing public.”
Check out SEC Tags Fiduciary as 'Long-Term' Action; Advocates Unfazed on ThinkAdvisor.