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.


Jason Roberts: The penalties are set in stone.

With the DOL's new rule 95% likely to get finalized, RIAs need to be wary -- it targets them with new letter-of-the-law ERISA red tape

Right now, most RIAs recommend IRA rollovers without having to jump through a lot of hoops, but DOL's 'exemption' makes a federal case out of suggesting the move away from the protection of the employer’s plan

July 14, 2020 — 7:21 PM by Jason Roberts, Guest Columnist

Brooke's Note: After we published Lisa Shidler's article last week about the new DOL rule, I got a call from one of its sources, Jason Roberts. See: New DOL fiduciary 'rule' unshackles broker-dealers to pursue commissions, declaring brokers ERISA fiduciaries by making simple disclosures ...

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John Swolfs: Event-focused organizations around the world are trying to hold their events in the most timely and effective manner that they are able. Inside ETFs and the rest of the financial event industry are all looking forward to having more flexibility after Covid has passed.

Oisín's Bits: With COVID-19 spiking in 27 states, RIA events like Wealth/Stack fight for late 2020 conference slots • Black Diamond taps startup Canoe for alternatives reporting • DOL quantifies RIA numbers

The InsideETFs event will compete with InvestWest for coveted late 2020 date, but without Josh Brown's stardust • SS&C's move follows Addepar advance and will include Advent products• The DoL sees net gains in RIAs of about 300 a year

July 8, 2020 — 2:23 AM by Oisin Breen

The COVID-19 pandemic, now spiking in 27 states, is still playing havoc with RIA events, causing popular gatherings like Wealth/Stack and InVest West to scramble for late 2020 dates to host ...

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Betsy Moszeter: It's not obvious why the DOL is proposing a rule specifically for ESG.

A big wince as Trump's DOL presses efforts to erase Obama-era ESG guidance, with tough new rule to curb do-good funds in ERISA accounts; critics cry 'politics'

Lawyers see crackdown as 'a solution in search of a problem' in regard to Labor Dept. pleas in proposed rule of danger that meeting environmental and social justice goals could harm returns, hence retiree security.

July 1, 2020 — 8:18 PM by By Lisa Shidler

Brooke's Note: You might have thought that the ESG horse left the barn long ago, now that it's at about $12 trillion and companies like BlackRock claim to be all-in. See: Chafing under $4 trillion of passive assets, BlackRock CEO warns Fortune 500 CEOs he may ...

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Eric Poirier: You would be hard pressed to get it done any faster.

Addepar extends business model from software maker to player in the investments business -- a secretive project 10 years in the making

The Mountain View, Calif., firm registers a broker-dealer then rolls out 'Marketplace' to virtually meld five big semi-manual platforms into one smoother, more digital NTF platform of alts -- and charge a hefty toll.

June 16, 2020 — 1:46 AM by Oisin Breen

Brooke's Note: When Chuck Schwab invented OneSource in the 1990s it was a huge advance. Funds were willing to pay his firm 35 basis points annually for all the assets that flowed to them because of all the marketing costs it saved them. Investors loved ...

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Plaid founders Zach Perret and William Hockey secured a lucrative sale to Visa on Jan. 22. But now, their company has to face down a class action suit.

'Fraud' lawsuit slams Plaid on eve of historic $5.3-billion payday; some experts say it's a 'fishing expedition,' but plaintiff's lawyers say, 'This is no shakedown' -- Second suit follows in July

It's been six months since Visa agreed to a wild valuation for the seven year-old Yodlee competitor that caused wealth fintechs to retain investment bankers left and right. Now Plaid faces two class action suits

June 10, 2020 — 12:40 AM by Oisin Breen

Brooke's Note: It's amazing how $5 billion galvanizes peoples' attention -- especially when such immense valuation baffles experts. A San Francisco-based startup with modest revenues, fewer than 500 employees and $309 billion of VC backing is set to be scooped up this month for a price tag ...

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Marcia Wagner: I do not anticipate a rush by plan sponsors to modify their investment platform.

Waving the flag of 'capital formation,' SEC promises to let the genie out of the bottle, allowing private funds in 401(k) plans; DOL silent

Right now, SEC limits which advisors can sell alts and who can legally buy them, blocking any realistic chance of putting $4-trillion 401(k) cache in Wall Street crosshairs

July 3, 2019 — 11:15 PM by By Lisa Shidler

Brooke's Note: No wonder the SEC can't come up with a standard to impose on stock brokers that puts the interests of investors ahead of salespeople. It revealed its biggest concern on June 18 when it listed "capital formation" as the top reason why private funds should ...

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Ron Rhoades: It is one thing to lobby and inform. It is quite another to orchestrate group boycotts, which are an anti-competitive practice.

Ron Rhoades tells Ira Hammerman that his response on SIFMA's behalf failed to address the 'undeniable' -- the threat of boycotts

The Kentucky professor schools the Washington lobbyist on the looming threat of broker-dealers forcing reps to sacrifice their CFP designations -- and questions Hammerman's math on 'one million employees' he claims to speak on 'behalf' of

June 20, 2019 — 6:37 PM by Guest Columnist Ron A. Rhoades

While I appreciate SIFMA’s engagement and reply to my prior article, which I fully stand behind, the major issues I raised therein were not addressed head-on by the Securities Industry and Financial Markets Association.

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Ira Hammerman: His column ignores entirely the merits of SIFMA’s recent comments about fiduciary regulatory initiatives. [Photo by LAI Video.]

Securities industry lobbyist Ira Hammerman disputes Ron Rhoades claim broker-dealers may restrain trade by threatening to boycott states with local fiduciary rules

The SIFMA executive vice president and general counsel says neither his organization, nor its constituents, runs afoul of anti-trust laws

June 20, 2019 — 2:37 AM by Guest Columnist Ira Hammerman

Dating back to 1912, through its predecessor organizations and in its current form, SIFMA has been the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets.

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Ron Rhoades says that when brokerage associations (i.e. FSI and SIFMA) and broker-dealers, like Morgan Stanley, offer threatening boycott comments in symphony, that they may very well break the law.

Broker-dealers' new power tactic -- threatening to quit states altogether -- to thwart local fiduciary rules for advisors sure looks like blatant misuse of power

SIFMA, FSI and Morgan Stanley made overt threats to Nevada and New Jersey and CFP Board that have more than a whiff of conspiracy to restrain trade

June 18, 2019 — 10:58 PM by Guest Columnist Ron A. Rhoades

Brooke's Note: Desperate times call for even more desperate measures. Threats by Morgan Stanley and their cohorts and lobbyists to pick up their toys and go home if states seek to impose on them a higher standard of fiduciary care are not being made from strength. ...

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Ben Cushing: [Larry] Fink likes to portray himself and his company as being a leader on [environmental issues] ... [but] you have to ask what actions the company is taking to actually back those words.

Oisin's Bits: Sierra Club slams Larry Fink's 'lip-service' to green future • Pre- VC raise SmartRIA is winning an RIA a day. Brian Hamburger counters: 'What happens when the tide goes out?' • Eric Clarke pairs up with Raj Udeshi's HiddenLevers

The un-wowed greens question BlackRock's white hat act ; SmartRIA doubles in size on flood tide; Orion gets business intelligence for RIAs from the guy in spat with Envestnet

June 5, 2019 — 8:59 PM by Oisin Breen

As climate concerns grow, and socially responsible investing gains traction, BlackRock ...

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Ron Carson: These [brokerage] assets are not a good use of [advisors'] time.

Edelman and Carson mark end of era as 'last holdouts' to dump FINRA, but are they jumping from frying pan into fire of SEC scrutiny?

Ron Carson and Ric Edelman ditch FINRA licenses, but both leave door open to commissions and Carson sees a recruitment lure

January 26, 2019 — 8:40 PM by Oisin Breen

Brooke's Note: As most advisory firms grow larger, they are able to bring more business in-house. Scale often dictates what gets outsourced. But as Ron Carson and Ric Edelman grow, they are running in the other direction, finally, at least with regard to commission assets. ...

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Ron Rhoades: The S.E.C.’s Regulation BI's attempts to redefine the English language, hence misleading individual investors for all time.

Will the S.E.C. aid and abet fraud in 2019? A fictionalized grilling of Jay Clayton under truth ether reveals the perils

With brokers the special interest, the simple principle of putting client interests first, gets mangled in the wording. But two can play that game so Ron Rhoades fights back with his pen

December 27, 2018 — 8:40 PM by Guest Columnist Ron A. Rhoades

Brooke’s note: While Ron Rhoades, RIABiz’s “One-Man Think Tank” was largely silent during 2018 in terms of his writings in industry publications, he has not-so-quietly been advocating at the S.E.C. and to other government agencies, through seven comment letters spanning a mere 318 pages and in ...

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Andy Rachleff wrote in his blog last year: 'The value of the tax-loss harvesting benefit at Wealthfront far exceeds the advisory fee in terms of the after-tax benefit.'

SEC clobbers Wealthfront on multiple alleged offenses; settles case with 'cease and desist' order, $250,000 fine

The big charge relates to tax-loss harvesting but Tweeting testimonials also comes into play

December 21, 2018 — 7:58 PM by Brooke Southall

Wealthfront agreed to a $250,000 penalty from the federal Securities and Exchange Commission (SEC) after the federal regulator alleged a series of violations, which it promised to cease and desist.

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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 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) system that ...

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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 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 side ...

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