Top RIA Compliance News Articles for the Week of August 31, 2018

1. Wealthy Investors Have a Big Cybersecurity Problem (Author- Ginger Szala, ThinkAdvisor)

As told to ThinkAdvisor Magazine by Aon Cyber Solutions CEO Jason J. Hogg, “cybertheft is important to all investors, but especially to high-net-worth individuals who might have greater exposure, less knowledge and more endpoints of access for thieves.” In a recent online survey conducted by Aon, they found that, “77% of respondents were concerned about risks posed to their finances by cybersecurity, and 78% were concerned about related issues on identity theft, numbers far above traditional financial worries such as market volatility (60%), or changing interest rates (39%).” Most importantly the article noted the importance of being proactive and to consider options such as cyber insurance. 

2. SEC Shouldn’t Open Up Unicorn Hunting to Mom and Pop Investors (Author- Stephen Gandel, Bloomberg)

According to a recent article in Bloomberg by Stephen Gandel, “Securities and Exchange Commission Chairman Jay Clayton says he’s looking at ways to open up the private market to mom-and-pop investors, allowing them the chance to get in on fast-growing companies like Uber Technologies Inc. and Airbnb Inc. Instead, he should be looking for a quicker way for companies to move from private to public markets, and back.” While speaking at a conference in Nashville earlier this week, Clayton “outlined a proposal to make it easier for less-than-wealthy individuals to invest in private companies.” According to some, “The private market’s ability to limit hype and investment is a feature, not a bug. If Clayton opens the market up to all investors, that feature is likely to go away, and fraudsters looking to take advantage of limited disclosure requirements are sure to flood in.” To read more on the subject, click here.  

3. Senate Banking Counsel Roisman Confirmed as SEC Commissioner (Author- Melanie Waddell, ThinkAdvisor)

As reported by Melanie Waddell, with an 85-14 vote, “Elad Roisman, the Senate Banking Committee’s chief counsel, was confirmed by the Senate Wednesday to serve as a commissioner at the Securities and Exchange Commission, replacing former Commissioner Michael Piwowar.” Roisman was questioned about the agency’s advice standards package during his nomination hearing before the Senate Banking Committee to which he responded, “it was important for the agency to act.” Roisman also encouraged the public to comment on the entire proposed advice package known as Regulation Best Interest.

4. SEC-registered advisers continue riding the fee-based wave (Author- Jeff Benjamin, InvestmentNews)

An annual report produced by the Investment Adviser Association (“IAA”) “dissects the public filings of 12,578 SEC-registered advisers and shows a trend toward steady asset growth, a continued preference for fee-based pricing and market share dominance by a small number of multi-billion-dollar firms.” Several findings in the report confirm the continued year over year growth of the RIA industry noting,”the number of SEC-registered RIAs has risen 3.3% from a year ago, the industry employs more than 805,000 non-clerical workers, an increase of 3.6% from a year ago.” The survey also notes, “Fees based on client assets under management continue to dominate financial planning, showing up as fee structures at 95.3% of SEC-registered advisers, up slightly from 95.2% in each of the past two years.” To read more findings from the annual report, click here.

5. Here are the Changes Planned for Broker-Dealer Industry CE Requirements (Author – Rita Raagas De Ramos, Financial Advisor IQ)

In addition to FINRA’s planned enhancements to broker-dealer continuing education requirements, the SEC “is considering whether registered investment advisors should be subjected to continuing education or licensing requirements in the same way that broker-dealers are required. The commission included a request for feedback on this in its proposed Regulation Best Interest package.” Several industry individual weighed in with opinions both for and against the potential new requirement. 

Don’t forget to check out last week’s top RIA compliance news articles on succession planning, the SEC’s Reg BI, and the process of starting your own RIA firm. Be sure to check back next Friday for next week’s top articles!