The North American Securities Administrators Association (NASAA) has released a list of best practices advisors should use after coordinated exams by 43 state and provincial securities examiners revealed deficiencies in a number of areas.
Of the 418 exams of advisors conducted between January 1, 2007 and May 31, 2007, 2,135 deficiencies were uncovered in 13 compliance areas, NASAA says in a release.
The 2007 examinations, conducted under the guidance of NASAA’s Investment Adviser Operations Project Group, found a 12% and 19% increase, respectively, in advisors with registration and books and records deficiencies. A slight increase in advisors with supervisory deficiencies was also noted, NASAA says, while the number of advisors with custody deficiencies dropped by 6%.
The top five categories with the greatest number of deficiencies identified in the examinations involved registration, unethical business practices, books and records, supervisory/compliance, and privacy, according to NASAA.