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.

Allison Brecher: In many cases, fees are buried, service offerings unclear, and administrative burdens cumbersome. The bill does not address any of these challenges.

Trump exec order on 401(k)s cuts restriction for MEPs but Vestwell execs counsel caution

Under ERISA-permitted MEPs, advisors can lump small employers into giant plans that battle big firms which is fine til you read the small print

August 31, 2018 — 11:30 PM UTC by Brooke Southall

Brooke's Note: As an journalist in September 2018, you want to catch Donald Trump doing something right to make real news. Man bites dog. So I was excited to see him sign an executive order that could do good things for unlocking a 401(k ...

Rob Farmer: The activity at the heart of this case was the result of Schwab having a robust compliance process designed to protect our customers.

Schwab Advisor Services's 'very tight ship' sprung leak that may signal a flood of SEC actions against custodians, leading to potential crack down on RIAs

The $1.6-trillion RIA custodian in San Francisco settles SEC lawsuit in a day by paying a $2.8 million fine in a case meant to be a 'shot across the bow' of custodians and RIAs, say analysts

August 3, 2018 — 12:24 AM UTC by Oisin Breen

Brooke's Note: One of the beauties of the RIA business is the simple trust that exists between advisors and regulators. The SEC gives RIAs lots of breathing room and RIAs repay the favor by running practices that minimize conflicts by excluding sales activity. The ...

1 Comment
Barnaby Grist: They asked me to help them find a firm to invest in and we’ve been talking to a bunch of firms. This was the first one I got really excited about.

Purchase of RIA in a Box with reclaimed Barnaby Grist as overseer shows ambition of New York buyer to create compliance 'robo-advisor'

Fresh off big AssetMark score, Aquiline's money talks, saying RIAs must spend big to comply but would like to spend smaller

June 1, 2018 — 3:01 PM UTC by By Lisa Shidler

Brooke's Note: RIAs serve two masters, even if in theory it's all one. Sure, the client comes first. But so does the SEC. Get one right and the other one wrong and the advisor, well-meaning or not, is sunk. So any attempt to innovate ...

Eric Clarke: Brian [Hamburger] is right. If you don't have a culture of compliance, it's going to be difficult.

After Orion user conference, CEO Eric Clarke greenlights new software layer -- spearheaded by his general counsel

RIAs told horror stories to the Omaha software firm in Phoenix about SEC compliance -- encouraged by presentation by NorthStar's Kylee Beach -- and it fell on receptive ears this time

March 27, 2018 — 11:50 PM UTC by By Lisa Shidler

Brooke's Note: On some level SEC audits are such a grim specter that RIAs and their vendors find it easier to simply use the old standby plan -- figuring it out when they get there. But under the sway of his company's attorney and some ...

1 Comment
Jason Roberts: What blew my mind is it’s one thing to evaluate your policies when you need to adopt them in the future, but it’s another thing to bake them into your manual.

How Scottrade's 'pain'-seeking sales tactics and 'cut-and-paste' lawyering allegedly led to breaching a DOL rule

Massachusetts securities cops seized on DOL rule clause still under delay and seeded effects for brokerage business that are pervasive and lasting

March 1, 2018 — 1:08 AM UTC by By Lisa Shidler

Brooke's Note: Absurdly big, disruptive occurrences are invariably the confluence of multiple factors colliding at a single point. Scottrade was a seller caught behind the winds of change in the advice business and desperate to sell before it got blown back even further. Hungry to ...

Brian Hamburger: We were only privy to their regular weekly updates, other firms received the privilege of additional information in advance of those updates.

SIFMA helps oust Bressler, Amery & Ross PC after alleged duplicity -- but weak pledge by replacement means 'issue' remains

Known DOL-rule naysayer Capital Forensics steps in to keep Broker Protocol list and draws immediate fire for stopping short of promise to avoid conflicts

January 31, 2018 — 7:59 PM UTC by By Lisa Shidler

Brooke's Note: This whole Keeper Of The Broker Protocol situation stinks to high heaven. The attitude of SIFMA and the keepers themselves is that selective dispensing of insider information is their just due for taking on the job and that RIAs blowing the whistle on this gentlemen's agreement are ...

MIchael Kitces: Do the math.

After PayPal demurs, Michael Kitces and Alan Moore launch online payments firm for RIAs

Advisors and two Missoula, Mont. angels will fund AdvicePay for increased staffing to sell and service software so that advisors can do billable hours without triggering a custody audit

January 25, 2018 — 7:41 PM UTC by Brooke Southall

Brooke's Note: The best business models arise from chronic pain without immediate access to morphine. Though much focus remains on what automation can add to investment advice, there is a counter-trend -- the reinvention of mass market, human-based financial advice. But that revival won't get ...

Don Trone: You've seen the old-school testing with the wires out of the head, but today it's wireless and it looks like a swim cap and you don't even need the goop to keep it on.

Claiming DOL rule has no handle on truth, Don Trone crafts lie detector test to assess RIA brains

The Neuro-Fiduciary & Governance Psychometric Instrument involves an EEG, an interview and six colleagues willing to vouch for your true fiduciary bona fides

December 24, 2017 — 5:23 AM UTC by By Lisa Shidler

Brooke's Note: Before editing this article, I quickly googled "lie detectors" and EEG to put my finger in the air to see which way the wind blows on the whole topic. No doubt the technology and its applications have radically improved over the years ...

1 Comment
Louis Harvey: One of the big things that RIAs had from day one was they could say they always put clients' interests first and now that argument is pretty much shot to hell.

How Merrill Lynch 'shot to hell' the RIA fiduciary citadel by casting its $7.5 billion fiduciary 401(k) unit as smaller, purer and more future-minded on paper

Despite FAS having fewer 401(k) assets than, for example, a single North Carolina-based RIA, CAPTRUST, the Charlotte-based Bank of America's brokerage unit has created a new competitive threat

December 16, 2017 — 12:20 AM UTC by Lisa Shider

Brooke's Note: If the decline of the wirehouse over the past two decades could be summed up in a phrase it would be "innovator's dilemma" -- the condition by which a giant, mature cash cow fails to reinvent itself -- even in the face of eventual ...

Shirl Penney (2nd from r., flanked by Rich Gill, Marty Bicknell and John Furey): ​Breakaways should expect to 'pay a 25% settlement fee moving forward.'

An RIABiz advertising exec derives hard meanings from soft comments made by big shots at MarketCounsel Summit

Post-TD Tom Bradley, post-refinanced Elliot Weissbluth, post-divorce David Bach and Ric Edelman, post-protocol Shirl Penney and post-windfall Marty Bicknell were among execs who tipped their hands and hearts about where they are headed

December 12, 2017 — 2:18 PM UTC by Graham Thomas

Brooke's Note: The most overused theme for an RIA speech is "the future of wealth management." Typically, such talks are neither about wealth management nor the future, unless platitudes about digital wealth count. But RIABiz marketing exec Graham Thomas's listening skills, powers of ...

Larry Raffone: At the very biggest Fidelity plans, they very much value the things that we offer.

Fidelity Investments (explicitly) enters 401(k) advice game -- then Financial Engines' shares plummet despite its 'Mutual Fund Store' RIA winning Boeing and Ford accounts

The Boston giant now offers non-discretionary advice to non-recordkeeping customers and Financial Engines cuts its prices, bleeding out Wall Street's belief in the firm

December 6, 2017 — 6:16 PM UTC by Lisa Shidler

Brooke's Note: We talk about Fidelity Investments having a "full stack" when it comes to the 401(k) business. But the Boston Big Boy has never stacked up to Silicon Valley micro-player Financial Engines when it comes to selling, arguably, the most value-added layer in ...

RIAs can move to the green pastures of 'integrity' to get past the muddy trenches of harmonizing a definition of 'fiduciary.'

It's time for RIAs to shift the 'fiduciary' debate and make it about 'integrity'

Integrity demands wholeness, which Wall Street can't claim as its sales staff and business model continues to get thrashed in the marketplace

December 1, 2017 — 2:19 AM UTC by Brooke Southall

Brooke's Note: The old aphorism about sticks and stones holds true. Wall Street knows it and celebrates as RIAs break bones over the meaning of words like "financial advisor," "financial advice" and "fiduciary." Now it's time for the RIA business to switch up the game as its market power ...

Micah Hauptman: We are not taking this lightly.

Pro-DOL rule forces sharpen knives now that DOL rule's 18-month delay is carved in stone

Labor Department loses formerly effective duck-and-weave defense tactic after 'U-turn' toward a more Wall Street golden goose ethos

November 28, 2017 — 10:14 PM UTC by Brooke Southall

Brooke's Note: In the blizzard of news regarding micro-moves concerning the DOL rule, this 18-month delay represents -- finally -- one of the macro variety. The bad news is that it's also radically retro, with the Labor Department literally citing 1975 rules as the basis for its new stance. But ...

1 Comment
David Spaulding: This is recognition that they’ll go after your own pockets too and be aware.

Guilty as charged, Howard Present retreats to no-harm, no-foul defense in sentencing phase

Back against the wall, the ex-F-Squared CEO hopes for leniency because 'no investors suffered losses' as SEC seeks $11-million disgorgement and $150K penalty

October 24, 2017 — 9:28 PM UTC by By Lisa Shidler

Brooke's Note: We all desperately want to believe in things that can't possibly exist. If something is to good to be true -- all the better! Every time we vote for a politician based on pie-in-the-sky promises we exhibit that behavior. Such self-delusion gets even ...

Brian McLaughlin: No one is offering advisors best practices for texting clients. It doesn't exist.

Caveats galore, Redtail attempts CRM revolution based on texting starting with 27,000 firms who use its software

Compliance experts and advisors throw down the gauntlet on CRM chat challenges but CEO/CTO Brian McLaughlin is unfazed

October 11, 2017 — 7:30 PM UTC by By Lisa Shidler

Brooke's Note: I am unqualified to edit this article in one important sense. I have never in my life sent a text. I am neither proud nor embarrassed about that fact. Never having texted is directly tied to my never owning a smartphone. (I'll ...