More On Legal & Compliancefrom The Advisor's Professional Library
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
"The Committee believes the essential question is 'What does fiduciary law require' and sought to inform the SEC study through the writings of many of the best known independent scholars with different views. This approach is fundamentally at odds with the opposing approach which seeks to tailor the standard to different business models. The difference is stark: one approach explores how practices should conform to a standard; the other approach explores how the standard should conform to business practices," Committee Chairman Knut A. Rostad told WealthManagerWeb.
The Committee has contributed the volume to the SEC's call for public comments which ended August 30. The Committee will also deliver "The Fiduciary Reference" to the SEC in person.
"At issue, among others, is whether all investors have equal access to fiduciary advice," Rostad said in a news release. "These articles are a 'must read.' While they represent diverse views on matters of implementation, they reveal common themes, including: how duties vary based on the disparity of knowledge between the advisor and client; that disclosures, while necessary, are not sufficient to fulfill, and not synonymous with, fiduciary duty; and that fiduciary requirements are not, as some suggest, 'vague.' "
The Fiduciary Reference is available both as a paper volume of approximately 1100 pages, and a Web-based reference. It includes 23 articles or papers written by the leading fiduciary thinkers and refers via link or abstract to 84 others.
Authors include Nobel Laureate George Akerlof, Professor Tamar Frankel of Boston University, Rutgers University Professor Arthur Laby, and a 1948 speech by the late Harvard Law Professor Louis Loss--who had been Associate General Counsel at the SEC.
Washington Event to Discuss the Fiduciary Papers
With several co-sponsors, the Committee will hold a Public Policy Forum in Washington DC on September 24, "The Fiduciary Standard in a Brokerage Setting." The event is co-sponsored by the Certified Financial Planner Board of Standards, Financial Planning Association, Financial Services Institute, and National Association of Personal Financial Advisors. The Forum is intended to bring leading fiduciary thinkers together to discuss all angles of the debate about extending the fiduciary standard to brokers who provide advice to investors.
Comments? Please send them to firstname.lastname@example.org. Kate McBride, AIF(R), is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.