More On Legal & Compliancefrom The Advisor's Professional Library
- Use and Misuse of Social Media Social media is an inexpensive and effective way to communicate with established and prospective clients. Nevertheless, when RIAs utilize social media to promote their advisory practices, they risk compliance problems for their firms.
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
Tim Ryan, CEO of the Securities and Financial Markets Association (SIFMA), said Monday during SIFMA’s annual conference in New York, that following the midterm elections, SIFMA will continue to work with the Administration, regulators and Congress to restore faith and confidence in our financial markets, including effectively implementing the Dodd-Frank Act.
Properly crafted rules, Ryan (left) said, “will safeguard our financial system while continuing to allow financial institutions to finance economic growth and job creation.”
Ryan said SIFMA would also remain engaged with Congress on “two pieces of unfinished business”: taxes and housing finance reform. “American investors face huge tax increases on capital gains and dividends at the end of the year if Congress does not act,” Ryan said. “SIFMA continues to support the permanent extension of the current 15% tax rate.”
The new Congress will also need to tackle housing finance reform. Ryan said SIFMA will work with Congress and the Administration “to resolve this complex issue, particularly with respect to the GSEs, in order to restore confidence in the U.S. housing finance market and open access to credit.”
Ryan also said that SIFMA will continue to work on “what will likely become a new uniform fiduciary standard of care” for investment advisors and broker-dealers when providing personalized investment advice to retail investors.
He cited the study that SIFMA released last week that was conducted by Oliver Wyman assessing how customer choice, product access and
affordability of advisory services would be negatively impacted “should a uniform fiduciary standard not take into consideration the different types of business models financial advisors work under.”
Advisory and consumer trade groups were quick to discount the SIFMA/Oliver Wyman study as baseless. Barbara Roper, Director of Investor Protection at the Consumer Federation of America (CFA), shot off a letter to SEC Chairman Mary Schapiro (left) saying that “even a cursory review of the study quickly demonstrates…that it offers no reliable analysis to support its conclusions.”
Indeed, Roper continued, “its authors either misunderstand or deliberately misrepresent the effect of imposing a fiduciary duty, invalidating the report’s conclusions. As a result, the Commission cannot make use of this analysis in its study of the impact of a fiduciary duty unless it first obtains the underlying data and conducts its own, objective analysis of that data. If SIFMA is unwilling to provide the underlying data, the Commission has no choice but to discount the study in its entirety.”
In the next two weeks, Ryan noted that SIFMA will also be submitting comment letters on the FDIC’s notice on orderly liquidation authority, the CFTC’s rule on swap reporting, and the SEC’s proposed rule on executive compensation based on deadlines established under Dood/Frank.
Ryan also welcomed SIFMA’s incoming Chairman of the Board, John Taft, who is CEO of RBC Wealth Management U.S.