Fulfilling its promise to protect retirement savers, the Securities and Exchange Commission said Monday that it has launched a multiyear targeted review of investment advisors’ and broker-dealers’ retirement planning sales practices.
The SEC’s Office of Compliance Inspections and Examination’s Retirement-Targeted Industry Reviews and Examinations (ReTIRE) Initiative will zero in on “higher-risk areas” of registrants’ sales, investment and oversight processes, with particular emphasis on select areas where retail investors saving for retirement “may be harmed,” the agency said.
Agency staff, the SEC said in its risk alert, intends to use data analytics, information from prior exams, and examiner-driven due diligence to identify registrants to probe under the initiative.
Exam focus areas will include whether these RIAs and broker-dealers have reasonable basis for recommendations, whether they are disclosing conflicts of interest and whether proper supervision and compliance controls are in place, as well as marketing and disclosure of products.
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As part of the exams or the selection of exam candidates, the SEC notes that OCIE examiners may focus on the activities of investment advisory reps and/or broker-dealer registered reps as well as branch offices.