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Compliance

New Disclosures for a New Year

Each year as we approach the annual update of disclosure documents for investment advisory firms, there seem to be more requirements and new questions to answer. The annual update due by March, 2018, is no exception.
One of the biggest changes is the level of detail required to report the client assets we manage. In the past, Form ADV Part 1 asked for the total of assets under management as of year-end and a general description of the types of clients served by showing a percentage range for clients in various categories.

Making Summer Vacation Work for You

When things tend to slow down in the summer, with many folks going on vacation or pursuing family time, their focus is not so much on doing business. This means that it may be a good time for you to work through some of the more tedious and oft-neglected tasks that are a part of your own business, at least when you are not taking family time as well!

Filing and organizing the paper and digital material that flows through your office on an almost continuous basis is a good way to not only catch up but also to tip you off to things you may need to follow through on for both your clients and your business.

Best Interests and Advisor Compensation

The DOL fiduciary rule may – or may not – come into play in some form this month, depending on several factors which are not yet fully known. But while we are waiting to see what happens, let’s consider what the benefits and detriments of the rule might be for the folks who are ostensibly to be helped by the implementation of the rule.

First, the easy one – the best interests of the investor must be the priority of the advisor or broker who recommends a particular investment for a retirement plan account.

Make a Note of It

We make decisions every day – large and small – and most of the time we consider various factors and have at least some basis for those decisions. When we are in business, and particularly where that business is subject to regulation, there is something we can do about the process that will help us both now and later. That something is as simple as making a note of the decision we made and a brief summation of the reasoning.

Well, that takes time and energy you say, and you need to address other things.

Another Reason to Read the Fine Print

A while ago, we talked about “reading the fine print” and why that may be important for any consumer to do. With all the discussion in the news about the proposed DOL fiduciary rule and its pros and cons, another aspect of that fine print has come to the fore. Rules and regulations are often created to protect certain groups and in the financial industry, other than protecting the jobs of the writers of such rules and regulations, the ostensible primary targets of the protections proposed are the consumers of the financial industry products and services – our clients.

Keeping Track of Your Social Media Use

Social media is at the forefront of activity for many people, whether for personal, business or other uses. If you are in business or interact with businesses using social media, it may be helpful – and in some cases is absolutely necessary – to keep track of what you are posting and sending to others. Naturally, most of us want to ensure that what we are saying through social media is appropriate and will not subject us to negative reaction. However, that can generally be handled simply by thinking through what we are posting before we do it.

Taking Care with Social Media

The news headlines and stories, the pictures and video clips, the online postings and even the tweets of millions are to be found practically everywhere these days. Whether involving celebrities or politicos, human interest and tragedy, silly or strange or just plain stupid, information about us is available and may, as they say, go viral. There is no certainty of privacy just about anywhere and you are almost certain to know someone who has received unwanted publicity through social media and its being repeated by the mainstream media.

Adviser Succession Plans

Among the many compliance concerns facing investment advisers, one that is getting much more attention these days is how one addresses what happens to the business and especially its clients when the adviser is no longer there. Whether an adviser is retiring, becomes disabled, dies or is required to leave the industry, there is a concern about what happens to the clients and the continuity of advice available to them. Regulators are looking more closely to see what advisers have in place and, at a minimum, are requiring some clear statement in that regard.

Annual Risk Review - Burden or Blessing?

Most advisers take time in March to attend to compliance matters, including the annual update of their disclosures in Form ADV Parts 1 and 2. Another compliance matter, often overlooked, is the performance of the advisory firm’s annual risk review. One might think that with all the time spent on compliance matters this is just another burdensome task. However, the annual risk review can be a very positive experience for the firm and its members.

The risk review typically is an internal document that is not required to be filed with the IARD, SEC or other regulator.

Making Sense of Conflicts of Interest

We hear a lot about conflicts of interest, usually in the context of how someone else has used their position for personal benefit as opposed to the goals of the person or entity for whom they ostensibly are working. Before condemning others, though, we should probably try to understand the nature and effects of such conflict as well as how we might address them.

First, how and when does a conflict arise? It might be said that many conflicts of interest are inherent in the relationship we examine.
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