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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.


Robert Pettman: We're essentially setting up a gating mechanism. The cash is going through the money market fund and that’s why it’s traded with waived. load shares.

LPL Financial clips wings of 20 top fund companies by asserting itself as 'gatekeeper' on newly launched DOL-proof 3.5% flat-commission mutual fund superstore

Using Labor Department as leverage, LPL cuts itself in as middleman between branded fund giants -- including Fidelity, Legg Mason and Putnam -- and its advisors' clients -- in exchange for semi-exclusive shelf space positioning

August 4, 2017 — 10:04 PM UTC by By Lisa Shidler

Brooke's Note: If you thought you heard rumbling in the distance, it might have been weather systems colliding to create a summer thunderstorm. Then again, maybe it was LPL and other broker-dealers bumping up against the largest mutual fund companies in the industry as they ...

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Anthony Scaramucci: Every dentist in America can have a $25,000 to $50,000 hedge fund portfolio, run by the best and brightest hedge fund managers in the world.

The art of the leveraged deal: Borrowing against the patience of a Chinese buyer, 41,000 FAs and the White House ethics office, Scaramucci scores 10 days of fame and runway to do more deals

Hedging his bets, 'the Mooch' took out Priebus and stayed 'on track' to sell his SkyBridge stake to the Chinese at an above-market valuation

August 1, 2017 — 11:41 PM UTC by Lisa Shidler and Brooke Southall

Brooke's Note: Anthony Scaramucci has one talent we can all agree on -- he closes the sale. He closed a series of 'em to get SkyBridge Capital to where it is today. Then he closed a deal that got him hired -- however briefly -- as White House communications director. So ...

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Anthony Scaramucci: I believe that you have to subordinate yourself to the greater good of the team.

Anthony Scaramucci tweets his way to Donald Trump's side after flaming out of investment business

After jumping into the fray to defend Donald Jr. on Twitter, 'the Mooch' -- once (maybe twice) fired as a Goldman Sachs broker -- will craft communications for Donald Trump as financial and legal smoke threatens to burst into flame

July 21, 2017 — 11:45 PM UTC by Brooke Southall

Brooke's Note: It took the media exactly one weekend to catch on to what the RIA business and Wall Street have known about Anthony Scaramucci for at least a year.​​​​ Maureen Dowd of the New York Times was particularly -- even alarmingly -- incisive, capturing Scaramucci in two sentences ...

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Jim O'Shaughnessy: LPL will allow us to give recommendations but you've got to make sure you're fully working in the RIA with compliance, supervision and that product recommendations are all under that umbrella.

LPL Financial's DOL-rule memo to reps implies deeper message: Become an RIA or stand down on giving rollover advice

The 'deep-pocketed' broker-dealer puts its Series-7 brokers on notice to forget about suggesting a rollover even as it gives its hybrid RIAs a strict protocol to stay out of trouble

July 5, 2017 — 8:02 PM UTC by Lisa Shidler

Brooke's Note: What LPL Financial does as the biggest IBD with a whole staff of compliance experts and an even bigger bench of outside attorneys and other consultants must not be considered casual in its intent. We took it seriously. Clamping down is always ...

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Ron Rhoades: Certificants may choose to exit firms that do not follow the CFP Board’s lead.

The CFP Board's thunderbolt fiduciary play should proceed and likely will

The 'fiduciary at all times' approach is likely to be supported by the 77,000 CFPs themselves, if opposed by insurance lobbyists and their ilk

June 20, 2017 — 8:33 PM UTC by Guest Columnist Ron Rhoades

nBrooke's Note: One of the challenges of gene therapy is applying the rewritten DNA to the human body. Scientists use the common cold virus to pierce each cell to gain entry. Perhaps the CFP Board is taking a page out of biotech's book ...

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Abby Salameh: Figure out what's really going on. The client can be on the verge of self-destructive move for a number of reasons.

Why an RIA's willingness to get fired by clients is a mandatory mindset -- now especially under the DOL rule

Yet the advisor may still be to blame for their own 'principled' dismissal before making a real effort to get at the underpinnings of a client's thinking

June 13, 2017 — 7:11 PM UTC by Guest Columnist Abby Salameh

Brooke's Note: In a sense, it's never about the advice. We all know deep down that we should cut the calories, not build a tool shed that drapes over a neighbor's property line, keep home office deductions on our tax return reasonable and avoid taking on ...

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Alexander Acosta: The Department does not require firms and advisers to give their customers a warranty.

Buried in 11th hour FAQs, Alexander Acosta finally zaps 'warranties' from the DOL fiduciary rule -- at least for June 9 implementation

The hyper-explicit fiduciary promises at Obama-era rule's heart survived multiple rounds of edits but quantity and specificity of language surrounding suspension of warranties suggests they'll eventually come back full force

June 2, 2017 — 6:19 PM UTC by Brooke Southall

Brooke's Note: In my time here in Maine, I have visited RIA offices and asked about the DOL rule, and one encounter I had this morning from a firm nearing $1 billion in managed assets was typical. In one spoken paragraph, a principal told ...

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John Castelly: A June 9 deadline is just like when we were back in school, thinking we would have a substitute teacher, so we didn’t do our homework, but the real teacher showed up instead.

How a Personal Capital exec electrified the NorCal FPA crowd with DOL details, relegating Jeff Gundlach and other stars to a dimmer sparkle

John Castelly elicited a school days nightmare leaving the Bond King to warn about the indexing bubble and Tim Kochis to caution against seeking for yourself in succession search

June 1, 2017 — 6:39 PM UTC by Guest Columnist Timothy D. Welsh

Brooke's Note: No matter how great it is to run an RIA, it always comes with a problem: There are no men and women in back rooms assigned to warn you about incoming meteors. Instead RIAs go to conferences and find out from each ...

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Fred Reish: You need the data in your file.

DOL fiduciary rule's upcoming September surprise'll send brokers memo-izing -- or else -- says Fred Reish in Nashville to a spellbound room

The Drinker Biddle attorney's invariably even tone gained inflection as he spoke of how brokers can only invoke BICE exemptions to go off DOL script by zealous, proactive documentation

May 25, 2017 — 7:53 PM UTC by Graham Thomas

Brooke's Note: People say certain things, and in certain ways, in front of different people. It is perhaps the best reason, from a content standpoint, to attend a conference. Graham Thomas was -- full disclosure -- in Nashville as an RIABiz advertising executive but he took notes ...

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Micah Hauptman: [Acosta's] comments suggest that [he] has pre-judged the outcome of the reconsideration and may plan to gut core provisions of the rule.

Alexander Acosta's DOL rule letter to WSJ contains double message and one long-term objective: 'Gut' it

Labor Secretary explains that flouting administrative rule is counterproductive but his comments to Wall Street Journal 'parrot' the brokerage lobby line, reassuring them that larger effort to kill the regulation is on track

May 23, 2017 — 7:29 PM UTC by Brooke Southall

Brooke's Note: Remember Andrew Puzder? Yes, President Donald Trump's original DOL secretary pick who eventually convinced would-be confirmation agents that the third and fourth letters of his last name should be transposed. Trump's next pick, Alexander Acosta, was such a vast upgrade ...

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Karen Barr: People know that in the sales process you're not acting in their best interests.

RIA lobby fires off letter to DOL claiming rules aimed at reining in overzealous stockbroker sales pitches chill RIA conversations with their prospects

The IAA's letter to the Labor Department asks that RIAs not get entangled in rules designed to prevent stockbrokers from making misleading pitches

April 20, 2017 — 5:16 PM UTC by By Lisa Shidler

Brooke's Note: The difference between a fiduciary and a non-fiduciary is that the financial advice and the sales pitch of a non-fiduciary amounts to about the same thing. For a fiduciary, the sales pitch is a preliminary communication that -- hopefully -- leads to an advice-giving process ...

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Joel Bruckenstein: I turn and think to myself this guy looks a lot like Marco Rubio.

Joel Bruckenstein pitches DOL rule to Sen. Marco Rubio after fate makes them JetBlue seat mates

Rubio opened up on small investors and retirement issues -- and cracked wise about the Russians

April 17, 2017 — 6:38 PM UTC by By Lisa Shidler

Brooke's Note: When friends outside the RIA business ask me what on Earth I write about that interests financial advisors, I'll often mention the DOL rule. Of course, they have no idea what I'm talking about. I frame it as the first ...

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Marcia Wagner: [It] essentially eliminates the need for transition agreements, disclosures and certain structural changes -- such as the appointment of a BICE officer -- that were formerly required to be in place on the applicability date.

'Poof, it's gone!' DOL quietly strips two heavy lifts from the fiduciary rule as it makes delay official

The Department of Labor effectively makes the 60-day delay into a 270-day one as part of document that was supposed to only formalize the postponement until June 7

April 5, 2017 — 7:41 PM UTC by Brooke Southall

Brooke's Note: It was supposed to make official a delay that had previously been announced. But It was much more.  See: How the DOL rule postponement is a blessing for RIAs that 'took their foot off the gas' -- and why Vanguard sees such delays as a ...

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Ron Rhoades: Will the President lead, instead of just blindly following the Wall Street insiders he surrounded himself with?

Donald Trump sends flurry of pro-DOL rule tweets early on Saturday that astound RIAs

Ron Rhoades admits he is 'absolutely stunned' at POTUS' fiduciary advocacy on Twitter -- perhaps the product of a chance golf course encounter that sparked the meeting of minds

April 2, 2017 — 8:39 PM UTC by Brooke Southall

Brooke's Note: Sometimes something so unbelievable happens over the weekend it forces RIABiz editors to take a break from restorative activities. Could it have been a coincidence that this story broke on April Fool's Day?

The President of the United States is apparently the ...

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Bill McNabb: A short deadline increases the risk that the DOL will not publish the necessary future delays before the rule becomes effective, requiring uncertain and unclear retroactive action by the DOL.

How the DOL rule postponement is a blessing for RIAs that 'took their foot off the gas' -- and why Vanguard sees such delays as a creeping menace

The Feb. 3 Trump executive order offered grounds for the pause but Bill McNabb warns this delay may beget a never-ending death spiral of delays and 'troubling' uncertainty

March 29, 2017 — 11:06 PM UTC by Brooke Southall

Brooke's Note: It would be funny if it weren't kind of serious. Experts are now identifying as the major factor in the DOL rule delays as the delays themselves. The way industry folks explain this latest June 9 delay it is that in the ...

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