Stay Current With Regulatory Developments.


posted in: Advertising & Marketing | 0

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 … Continued

The Need for a Risk Assessment

posted in: Compliance | 0

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, … Continued

Three Steps in Developing an Effective IPS

posted in: Client Relations | 0

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 … Continued

Soft Dollar Disclosures

posted in: Brokerage Practices | 0

One part of Item 12 (Brokerage) in the ADV Part 2A that advisers tend to miss when disclosing their soft dollar activities: You must describe the types of products and services you or any of your related persons acquired with … Continued

Undisclosed Compensation Arrangements

posted in: SEC Examinations | 0

Such arrangements may include, among others, undisclosed solicitation arrangements. It is not uncommon to have a discussion with a client about whether they can pay a certain person for client referrals. Often they cannot because the person is not qualified … Continued

An Ounce of (Compliance) Prevention

posted in: Compliance, SEC Examinations | 0

The enforcement staff gives credit to registrants that demonstrate effective compliance programs and a genuine commitment to ethical principles.  Advisers should focus on persuading the enforcement staff of the quality and depth of a firm’s compliance culture and its record … Continued

5 Exam Focus Areas for New Advisers

posted in: SEC Examinations | 0

The SEC has been engaging in shorter, more streamlined “presence exams” for newly registered advisers.  The following five focus areas make up the bulk of these exams: Marketing; Portfolio management; Conflicts of interest; Safety of client assets; and Valuation.  Streamlined … Continued

Don’t Exaggerate AUM

posted in: Registration & Licensing | 0

Assets under management is a defined term on Form ADV. Don’t exaggerate to stay registered with the SEC. The SEC has enforcement actions underway against multiple SEC-registered advisory firms that puffed up their assets.

ADV Part 2A Disclosures

The SEC’s website specifically lists “Form ADV Disclosures” as a risk that may be present as part of an investment adviser’s everyday operations. Some of the specific risks listed are: Inaccurate, omitted, or unclear disclosures; Out of date disclosures; Misrepresentation … Continued

The Compliance Manifesto

posted in: Compliance | 0

In a recent speech an SEC official said that the presence of robust, effective compliance programs would allow companies to reap significant credit in their dealings with regulators. He spoke about the ways the SEC supports compliance and ethics programs. … Continued

Duty to Disclose

Investment advisers have a fiduciary duty to act in the best interests of their clients. A central tenant of this duty is full and fair disclosure of all material facts to clients. So what you tell your clients about your … Continued

Common Registration Deficiencies

posted in: Registration & Licensing | 0

Applicants for investment adviser registration should not only be concerned about the accuracy of their firm’s primary registration documents (i.e., Form ADV Part 1 and Part 2A), but also that these documents, along with the firm’s advisory agreements, are consistent … Continued

Do You Have a Mobile Device Policy?

posted in: Privacy & Data Security | 0

With the proliferation of smart phones, iPads and table computers in the advisory business, I would suggest that all advisers probably would benefit from developing and implementing policies and procedures regarding their use. Here are some issues you should consider: … Continued

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