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RIA Compliance

The past two years have been some of the most momentous in the relatively short history of the RIA profession. Legislators and regulators have been gradually embracing the fiduciary standard, though whether it will fully apply to everyone calling themselves advisors remains to be seen.

The Department of Labor’s crusade to lower costs and increase transparency in retirement plans means a spate of new regulations affecting advisors and brokers in that market. Dodd-Frank Financial Reform, meanwhile, continues to unroll across the profession, with the biggest change being a shift to state oversight of RIAs with less than $100 million AUM. In this section, you’ll find continually updated RIABiz.com coverage on all these topics.


Irwin Stein: These brokers get fired not because they lied to their customers but because they lied to their firms.

The sorry truth about the SEC's plan to crack down on bad stockbrokers by putting RIAs in a vise

The move is a clear diversionary tactic on the SEC's part to avoid flexing its muscles and withhold licenses

September 16, 2016 — 5:06 PM UTC by Columnist Irwin Stein

Brooke's Note: We talk plenty about the fiduciary duty of advisors. But what about the duty of regulators to advisors? Fairly or not, a profession gets judged as much by its handful of quacks as by its thousands of dutiful practitioers. So if the regulator of that profession isn't weeding out the quacks, it does a diservice to those it polices. Irwin Stein, long an attorney in this field and now an RIABiz writer, called my ...

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Après moi le déluge? Outgoing FINRA chief Rick Ketchum engineered a bold bid for RIA oversight but leaves a flailing organization.

What FINRA's CEO shuffle reveals about its waning viability as the self-funded fox guarding the investor henhouse

As Richard Ketchum departs amid fulsome praise, FINRA's failed bid to make RIAs 'rules based' combined with member unrest leave the SRO in deep dilemma mode

August 25, 2016 — 9:41 PM UTC by Natalie Carpenter

Brooke’s Note: Will history be kind to Richard Ketchum for the way he spent his seven years as head of FINRA — complete with a lovely oil painting him hung in a prominent spot in the Wall Street Hall of Fame? Possibly. After all, he took the organization from circa 2009 humiliation to some form of 2016 swagger. But there seems to be an equally good chance that his painting will be hung fondly by ...

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Dale Brown via Skype: We filed the lawsuit to win, not to make a statement or lambaste the DOL.

Jaws drop after Dale Brown Skypes keynote address to Laser App conference with the claim: 'We were fiduciary believers long before being a fiduciary was cool'

The FSI chief's comments lit up Twitter then T3's Joel Bruckenstein and cleverDome announced a cybersecurity consortium at the San Diego gathering

August 15, 2016 — 8:03 PM UTC by Timothy D. Welsh

Dale Brown was supposed to be the star speaker at 10th annual Laser App conference last week, but no-showed.

No problem.

The CEO of Financial Services institute Inc. appeared live-by-Skype on a 20-foot screen from his lobbyist office back in Washington D.C. to speak to the 250 people assembled at the Marriott Marquis in Downtown San Diego.

Brown bolstered his keynote-by-keystroke billing with head-spinning historical context for fiduciaries and the DOL rule. See: As ...

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Dawn Bennett: We weren't an RIA and weren't running our books like an RIA. We were an independent B-D and were doing it correctly that way.

In exclusive RIABiz interview, Dawn Bennett tells how she's striking back at SEC after a $4-million legal drubbing has left her 30-year career in shambles

The advisor and popular radio host has hired the 'London Whale' attorney to prove she and her firm were victims of a regulatory witch hunt

August 1, 2016 — 4:52 PM UTC by Sanders Wommack

Brooke’s Note: The most horrific injustice imaginable is when somebody is wrongly accused of a crime and found guilty. Our legal system does a few back flips to insure that we let 100 bad guys and gals go free before making a sacrificial lamb of one good person. Still, it happens that good people get bad justice. But I admit I was one of the people who presumed that the Dawn Bennett case was ...

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James Dowd: There is no correlation between an investor's income and net worth and their investment sophistication.

How the SEC is poised to hand RIAs the keys to the $1.3 trillion private placement market -- largely at the expense of stockbrokers

Dodd-Frank kicked off a series of events that demanded a more rational way to define the sophistication of investors and who is best able to judge investments that don't have prospectuses

July 20, 2016 — 9:54 PM UTC by Irwin Stein

Brooke’s Note: The story of the future of the advice business will largely be based on how best to administer mass regulation of advisors. But all models of regulations look bad. FINRA has given SROs a bad name. The SEC has given federal regulation a bad name. RIAs still have a good name and that is why lawmakers appear poised to make RIAs the lords of private placement distribution. The GAO is recommending RIAs ...

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Ron Rhoades: Any 'complexity' ... is the direct result of their own appeal to the DOL to adapt the fiduciary principle to the conflicted compensation practices of the B-Ds and insurance companies.

The short scoop on Wall Street's claim that the DOL rule is too long

The core of the Labor Dept's rule is 237 words; blame the prolix portion on exemptions accorded to complainers' interests

July 19, 2016 — 6:53 PM UTC by Guest Columnist Ron Rhoades

Brooke’s Note: I keep searching for a way to define “Wall Street.” It hasn’t referred to a group of people at one geographical location for a while. Rather, it is a mindset and culture of convenience that rewards financial advisors for doing work that is good for their companies. Those financial firms, in turn, give their employees and partners a plum living, self-esteem and a sense of belonging. Part of that energized attitude ...

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Sheldon Geller: It is the plan sponsor, not Fidelity, who makes the fiduciary decision as to whether to offer the investment advice service to their employees.

Delta employees sue Fidelity for 'illegal kickbacks' from Financial Engines

The case may turn on whether Fidelity, by acting as recordkeeper and administrator, qualifies as a fiduciary and therefore breached its duty as it accepted Financial Engines' advice fees

July 6, 2016 — 6:58 PM UTC by Irwin Stein

Irwin’s Note: Brooke is constantly telling me to report what I see and to keep my opinions to myself. But, having been a practicing securities attorney for more than 40 years, and since my opinion here is about other attorneys, he has given me some leeway. This case revolves around what an investment advisor acting as a 401(k) fiduciary does with its fee after it earns it. Because it chooses to split the ...

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Jon Stein [to CNBC]: The only thing I would do differently is I would put a notification in the app and say, 'By the way, we delayed trading right now,.

Betterment explains why its Brexit-sparked trading halt on Friday wasn't 'suspended' trading

The $4.8-billion robo-advisor frames its trading actions in terms of discretionary management of assets but the prerogative it asserts puts RIA clients in a tight spot

June 28, 2016 — 10:43 PM UTC by Lisa Shidler

Brooke’s Note: Betterment is, without a doubt, one of the most exciting, promising young companies in the RIA business. New York-based, VC-cash infused by $200 million-plus, flush with $4.8 billion of managed assets and with success in retail, RIA and 401(k) channels, this company is where the action is on so many fronts. However while nobody can argue with the brilliance of its growth, there are inevitable questions, prominent among them: How ...

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Kathleen McBride: [Non fiduciaries] want to be able to check off the box and in so doing find ways to work around the rule.

DOL rule still has feet tangled in the struggle to define difference between 'suitability' and 'fiduciary'

Fiduciares keep flunking a definition of useful accountability and the giant brokerage lobby keeps exploiting its 'F'

June 27, 2016 — 6:26 PM UTC by Brooke Southall

Brooke’s Note: Sometimes I think the brokerage crowd has a point. It seems almost to be pleading with the fiduciary crowd to do what it can’t — speak English gooder. It seems to say: Tell us in words we can understand and pass along to our constituency just exactly fiduciary care is, why it’s so great and what enforcement of it looks like. It’s not easy. And as the DOL rule bumbles ...

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LPL put four people in a new Washington D.C. office with a criss-crossing legislative agenda in mind.

LPL Financial dumps FSI then goes full swank on lobbying office -- but legislative agendas of FSI and LPL don't reveal any divide

The big broker-dealer stopped paying dues to the Financial Service Institute but it'll pay up for hot offices near the White House

June 8, 2016 — 10:19 PM UTC by Lisa Shidler

Brooke’s Note: We used to talk about polarized politics — with the right and left at the two poles. Now with both sides finding little to like about Donald Trump, what do you call it? The same question might be asked about what is happening in a financial services industry that used to split along the lines of fee-charging fiduciaries and brokers that had a more caveat emptor approach to selling products. But now … let ...

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