More On Legal & Compliancefrom The Advisor's Professional Library
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
- 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.
The Investment Management Consultants Association’s national conference is the organization’s “capstone gathering place,” said CEO and Executive Director Sean Walters, and this year’s event in Boston, starting May 4 and running through May 7, is expected to have a total of 1,700 attendees.
That number, which includes about 75 attendees who are participating in an optional Advanced Investment Strategist (AIS) certificate session on May 4, is an increase from last year’s national conference, Walters said in an April 27 interview, and is the fourth straight year of growth for the event. The organization, which counts 9,100 members as of year-end 2013, has long been known for awarding the respected CIMA certification: There were 6,629 CIMA holders as of 2013 and 729 CPWAs, or Certified Private Wealth Advisors, a designation launched in 2007.
Walters said that the CPWA designation “has taken off this year” as “more and more firms are finding that valuable.” The number of CPWAs grew by 5% last year, he said, and the number has grown “another 3% to 4%” already in 2014. Since 2007, the number of CIMA holders has grown 33%.
Regarding its core designation, Walter said “we’ve updated the content for the CIMA program, which went into effect on January 1” of this year, with the first exams covering that revised curriculum beginning May 1. At the beginning of this year, the Tepper School of Business at Carnegie Mellon University joined the Wharton School at the University of Pennsylvania and the Booth School of Business at the University of Chicago as providers of the CIMA curriculum. As IMCA’s membership has grown to include more RIAs in addition to its core membership in the wirehouses—29% of its advisor members are independent advisors, including 14% RIAs and 12% IBD reps, IMCA has become more sensitive of the cost of its education and certification. “If we’re going to serve independent advisors,” Walters said, “we have to have lower costs.” So compared to the near $8,000 pricetag at Wharton, the cost at Carnegie Mellon, “where Roger Gibson is teaching,” is closer to $4,500 or $5,000, which is “more along the lines of what” a CFP could expect to pay for education.
Not that Walters and IMCA look down on CFPs at all, but rather see the value of having a CIMA or CPWA on an advisory firm’s team. “I feel strongly that in an independent advisory practice, a CFP is good for the team, but a CIMA or CPWA is valuable too, allowing them to be more comprehensive.”
Moreover, Walters said that high-net-worth clients “are in the cross hairs of nearly every advisor. But from a team perspective, those clients have a broad set of needs that can’t be addressed from the perspective of only one designation.” He also cited an Aite research study that sought to quantify the value of a CIMA designation. Firms with a CIMA, the study reported, “had greater assets per client and greater wallet share per client. If your high-net-worth client wants you to invest in alternatives, you as a CIMA can do it.”
When asked about the hot topic of robo-advisors and whether IMCA is addressing the issue of online advice purveyors, Walters said the issue is “worth the board of directors” for sure, noting that “there are some terrific technology tools for investors and advisors to consider.” While “the scale and complexity of investment products” continues to grow, he argued that “having an advisor able to navigate [that complexity] won’t go away,” and wondered whether amid the complexity of investment products and the media buzz that surrounds the markets and investing, “will robo-advisors separate the signal from the noise?”
The organization is also “all about standards” in its operations and certifications, Walters said, citing IMCA’s ANSI accreditation from the American National Standards Institute, the U.S. arm of the International Standards Organization, or ISO. “We passed our first audit from ANSI after three years,” he reported. “We have to resubmit every year” to ANSI to demonstrate “why we require everything we do” from its certificants and in its operations.