Compliance Solutions for Investment Advisers

Monthly Archives: August 2015

Keeping Trade Confirmations

Recently an adviser asked if they still needed to keep trade confirmations since they were retained by their broker-dealer/custodian. I think an adviser must retain them in their books and records for three reasons: 1.  The repository at the BD is the BD’s books and records and not the advisers.  Therefore, the adviser is technically

Everyone is Responsible for Compliance

Busy schedules and deadlines can make shortcuts seem appealing. But the work we complete and how we complete it matters.


Yesterday, for whatever reason, I was rummaging around a few adviser web sites and came across one that included a testimonial. How did I know it was a testimonial? Was it my compliance expertise? My familiarity with the nuances of marketing and advertising? My ability to discern the hidden meaning behind the written word? Nope.

The Need for a Risk Assessment

The SEC has made it clear time and time again that the first step toward developing strong written policies and procedures is for an investment adviser to identify all areas that create risk exposure or the potential for risk exposure. Accordingly, a risk assessment should serve as a mechanism for an investment adviser to identify its unique

Three Steps in Developing an Effective IPS

The initial questionnaire should accurately identify the client’s circumstances, investment objectives, risk tolerance, and all investment restrictions and preferences. Review of the questionnaire responses is a great time for the advisor to assess the client’s investment sophistication and to provide the client with capital markets education. The draft IPS is the initial IPS version, including

Alert – Insider Trading

The purpose of this Compliance Alert is to familiarize you with key insider trading concepts and issues. What is Insider Trading? The buying or selling of a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading is the

SEC Audits – Expect the Unexpected

As most of you know (and dread) the SEC sends out a document request list about two weeks prior to the on-site portion of the audit. However, be prepared to provide other documents on the fly. For example, examiners have been known to request changes made to the adviser’s web site for the past 12

Define a “Material” Compliance Event

The SEC Office of Compliance Inspections and Examinations encourages advisory firms to define what a material compliance event is for their organization. While there as many definitions as there are advisory firms, a common definition of a “Material Compliance Event” is “a breach of a securities rule or regulation, a willful violation of a Company policy