Archive for August, 2015

Thanks, Ajay, we love ‘Born by @MarketCounsel’ success stories! via @FAmagazine @NJChrisRobbins

Thursday, August 27th, 2015

Ajay Gupta has received attention for his high-profile clientele, who include self-help gurus Deepak Chopra and Tony Robbins.  Gupta Wealth Management serves high-net-worth and ultra-high-net-worth families, endowments and foundations nationwide.  In 2013, as the largest UBS affiliate in San Diego, managing around $540 million in client assets in almost 120 accounts, Gupta once more considered his options. “In 2010, I started buying real estate. I thought it was a good idea because I was buying it substantially below cost. I was also interested in BlackRock Fund Advisors strategies, but I was blocked from making purchases on the Merrill Lynch platform. I started to think more about how I could build responsible portfolios with the funds I had access to, but it was very difficult.” As his frustration mounted, Gupta brought on Englewood, N.J.-based MarketCounsel to help guide the transition to independence. “I felt it was the right decision at the time,” he says. Gupta was nervous about breaking away, unsure of how his clients would react.“My biggest concern was going to be that I resign and nobody follows,” Gupta says. “That I put up my own office, my own location on a long-term lease, and no clients follow.”

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FinCEN Proposes AML Rule for Investment Advisers

Wednesday, August 26th, 2015

On August 25, 2015, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, proposed new rules that will require investment advisers that are registered with or required to register with the U.S. Securities and Exchange Commission (“SEC”) to adopt programs designed to prevent money laundering and to report certain suspicious and other activities to FinCEN pursuant to the Bank Secrecy Act (“BSA”).

For starters, registered investment advisers would be required to adopt customized anti-money laundering (“AML”) programs that are “reasonably designed to prevent the investment adviser from being used to facilitate money laundering or the financing of terrorist activities and to achieve and monitor compliance with the applicable provisions of the BSA and implementing regulations.”  Such AML programs must be comprised of at least four elements:

  • Advisers would need to adopt AML policies, procedures and internal controls based on the investment adviser’s identification of specific money laundering and terrorist financing risks associated with its business. This would require an adviser to consider the types of clients served and the nature of its advisory activities.
  • An adviser would need to arrange for periodic independent testing of its AML program either by a qualified third party or by a firm employee that is not involved in the operation or oversight of the AML program.
  • An adviser would be required to appoint a person or committee to implement or monitor the operation and internal controls of the AML program. The person or committee members should be knowledgeable concerning FinCEN’s regulatory requirements and the adviser’s specific AML risks and have sufficient responsibility and authority to develop and enforce policies and procedures designed to address such risks.
  • An adviser would be required to provide ongoing training regarding the AML policies and procedures to appropriate employees.

Also, under the rule proposal, investment advisers would be required to file suspicious activity reports (“SARs”) to FinCEN with respect to suspicious activities involving at least $5,000 in funds or assets.  More specifically, an adviser must file a report if it knows or suspects that the transaction or group of transactions (a) involves funds derived from illegal activities or is intended to disguise Illegal activity; (b) is designed to evade the BSA requirements; (c) has no apparent lawful purpose; or (d) involves the use of the investment adviser to facilitate criminal activity.

Additionally, an adviser must report any currency transaction (or group of related currency transactions) involving more than $10,000 that is conducted by, through or to the investment adviser on a currency transaction report (“CTR”) and keep delineated records related to the transmittal of funds.

FinCEN is also proposing to delegate to the SEC responsibility for examining investment advisers for compliance with the proposed regulations.  Comments on the rule proposal must be submitted within 60 days of the publication of the rule proposal in the Federal Register.  AML programs would need to be implemented within 60 days of the effective date of these proposed rules.

These requirements probably look familiar to everyone.  That’s because they are required for the custodians, including banks and broker-dealers, that must be utilized in order for advisers to provide services.  It’s difficult to imagine a client using an adviser to conduct money laundering or terrorist financing without having to go through a financial institution’s AML program.  Therefore, the proposed rule regarding investment advisers would just add a redundant set of costly regulations on businesses.

We will continue to follow the rule proposal and will provide updates regarding any additional insights and developments.

Psyched to be finalists for TWO @wealth_mgmt #industryawards!

Wednesday, August 26th, 2015

MarketCounsel President and CEO Brian Hamburger discusses the firm’s RIA Incubator Program, a finalist as an “Industry Disruptor” for the 2015 WealthManagement.com Industry Awards. The MarketCounsel Summit is also a finalist in the Thought Leadership category of the 2015 WealthManagement.com Industry Awards.

Watch more.

Happy Birthday to the Investment Advisers Act of 1940! She is 75 years old today.

Saturday, August 22nd, 2015

Let’s hear it for our newest (and tallest) MarketCounsellor yet: Ed Slezak joins us as Managing Director and General Counsel.

Wednesday, August 19th, 2015

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Delivering hyper relevant industry content is something we take pride in, currently hard at work on #MSUM15 via @RIABiz.

Thursday, August 13th, 2015

“MarketCounsel has perfected the art of speaker lineups, managing to keep the content entirely relevant to the RIA audience while keeping attendees engaged and intrigued. Sure there is shock factor in headliners like Mark Cuban and Eliot Spitzer, but those of us in the audience were more shocked by their deep industry knowledge and relevant content. When you’re able to provide attendees with content that makes a difference to their business, they’ll keep coming back year after year.” – Megan Carpenter

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‘An RIA without its principal is among the most rapidly depreciating assets that I’ve ever seen…’ – @HDelux via @newsfromIN

Monday, August 10th, 2015

When investment advisers who are sole proprietors die unexpectedly without a continuity plan in place, the firms where they house client assets react rapidly. “Custodians are increasingly adept and swift at taking action,” said Brian Hamburger, president of MarketCounsel, a compliance consultant. “[They] are in a position to immediately suspend many of the trappings of their business relationship” with the advisory firm. Among the steps a custodian could take are shutting down the master account, freezing the debiting of fees and suspending trading. “It impacts the ability to serve clients,” Mr. Hamburger said. “The staff will find it difficult to interact with the custodian on the client’s behalf.”

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Congrats to @LiveOakBank on Their Recent IPO

Friday, August 7th, 2015

Live Oak Bank (LOB), a lender to the independent advisor community, successfully launched an IPO on July 28th. Raising nearly $90MM in capital, LOB is poised to continue to execute its strategy of becoming the premiere source of debt capital to RIAs. Read more here.