Some pension consultants continue to display weaknesses in compliance.[@@]

Lori Richards, director of the compliance inspections office at the U.S. Securities and Exchange Commission, made that argument Monday in San Francisco, at the annual meeting of the Public Fund Boards Forum.

Although pension consulting firms are taking many steps to insulate advisory activities from other activities, disclose conflicts to clients, and implement changes in policies and procedures, some shortcomings remain, Richards said, according to a copy of her speech posted on the SEC Web site.

Richards noted that one firm sold its interest in an affiliate that sold analytical services to money managers and other firms have set dollar limits on the value of gifts to employees.

But, “on a less encouraging note, it did not appear to us that all pension consultants had implemented policies governing the payment of their fees with directed brokerage,” Richards said.

A number of firms also failed to give clients their codes of ethics, Richards said.

A copy of Richards’ speech is on the Web at http://www.sec.gov/news/speech/spch120505lr.htm