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.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
Fiduciary advocates are gearing up once again to engage in a monthlong debate about the importance of the two fiduciary rulemakings being considered by the Securities and Exchange Commission and the Department of Labor.
The Institute for the Fiduciary Standard kicked off its upcoming Fiduciary September celebration by announcing Monday its monthlong agenda, which includes awarding Gary Gensler, former chairman of the Commodity Futures Trading Commission, with the Institute’s 2014 Frankel Fiduciary Prize at a luncheon at Columbia University on Sept. 19.
Knut Rostad, president of the Institute, told ThinkAdvisor that members of the Institute, which includes Vanguard founder John Bogle, will be meeting with SEC officials in September.
SEC Chairwoman Mary Jo White has said the agency will make a “threshold decision” this year on whether to move ahead with a uniform fiduciary standard for brokers and advisors, while the DOL has moved the release of its redraft to amend the definition of fiduciary under the Employee Retirement Income Security Act to January.
Rostad says that it remains to be seen if the fiduciary standard “survives” the “ongoing assault” by the broker-dealer and insurance industries.
Indeed, Skip Schweiss, president, TD Ameritrade Trust Co., and managing director of advisor advocacy and industry affairs at TD Ameritrade Institutional, told ThinkAdvisor that TD’s second Fiduciary Leadership Summit, to be held in Washington Sept. 15-17, is particularly important now because there’s “a small but growing body of thinking in the advisor space that if regulators cannot or will not move ahead with rulemaking on a fiduciary standard, then maybe the profession should.”
The advisory industry also worries that “any potential [fiduciary] rulemaking could tilt toward being disclosure-based as opposed to a true fiduciary standard of care for consumers,” Schweiss added.
Among other topics, the TD event — which will include regulators, lawmakers and leading academics as speakers — will explore “alternative paths to making sure investors receive the standard of care they deserve, and that they are clear on the different types of financial advice and guidance,” Schweiss said.
Events to be held by the Institute for the Fiduciary Standard in September include a best practices board meeting and media briefing on Sept. 15, as well as three webinars: the “State of Investor Protection in Securities Markets in 2014 in Federal Regulation,” “Restoring Investor Trust in Wall Street and Investment Advice," and a call for advisors to discuss updates on the development of fiduciary best practices. Dates for the webinars have not been scheduled.
The Institute will also launch a podcast called “Best Interest Investing.”
Check out Advisory Industry Wants More Exams (and Will Pay for Them, Too) on ThinkAdvisor.