Archive for January, 2016

Joel Bruckenstein (@fintechie) writes: “RIAglass is one of the more promising applications I’ve come across lately.”

Wednesday, January 27th, 2016

We’re glad he sees what we see.

Read more.

Joel Bruckenstein (@fintechie) writes: “RIAglass is one of the more promising applications I’ve come across lately.”

Wednesday, January 27th, 2016

We’re glad he sees what we see.

Read more.

Brian Hamburger (@HDelux) touts the benefits of working with RIAs to @NorbVonnegut @WSJ

Thursday, January 21st, 2016

In today’s Wall Street Journal, Norb Vonnegut makes, what he calls “an inconvenient observation about fiduciaries”:

When an investor works with an independent RIA, “your account is actually subject to more review” than at a typical brokerage, says Brian Hamburger, president of MarketCounsel.  Mr. Hamburger, whose firm helps brokerage-house advisers launch independent RIAs, explains that most RIAs never touch client cash or securities. Instead, brokerage firms serve as custodians, holding assets and executing trades on behalf of RIA clients.  Clients are benefiting from regulatory oversight by both FINRA and the SEC, says Mr. Hamburger, as well as from the presence of two unrelated financial institutions reporting independently to clients.

Read more.

Here’s what #advisors REALLY think about the term, “#fiduciary” with @USNews @USNewsMoney @KateStalter.

Monday, January 4th, 2016

Asset-management firm CLS Investments and compliance consulting firm MarketCounsel recently surveyed 200 independent financial advisors about the fiduciary standard. It asked about advisors’ own perceptions of the term, whether they considered it worthwhile to describe themselves to clients as fiduciaries and whether the term should be applied uniformly throughout the industry.

The findings revealed some rifts among advisors in how they perceive and apply the fiduciary standard.

  • Eighty percent of advisors consider themselves to be fiduciaries.
  • Nearly 37 percent of respondents consider the term to be meaningless, given a lack of understanding of a fiduciary’s function.
  • Eighty-three percent of respondents who identify as fiduciaries completely or partly disagree with the statement, “Fiduciary oversight is applied consistently throughout my organization.”
  • Nearly 70 percent of all respondents say being a fiduciary is not determined by how an advisor is compensated, nor how the standard of care is disclosed.
  • Seventy-five percent say acting solely in a client’s best interest defines a fiduciary.

While advisors may disagree on many aspects of the term’s definition or application, most understand that the fiduciary standard requires them to act in clients’ best interests.

Read more.

President Signs FAST Act to Grant Registered Investment Advisers Relief from Privacy Notice Delivery Requirements

Monday, January 4th, 2016

On December 4, 2015, President Obama signed the Fixing America’s Surface Transportation Act (the “Fast Act”) into law. While the principal purpose of the statute is to address the nation’s highway and other transportation infrastructure, the Fast Act provides relief to investment advisers. Specifically, Section 75001 of the Fast Act amends Section 503 of the Gramm-Leach-Bliley Act (the “GLBA”) to provide an exception to the requirement that registered investment advisers and certain other covered financial institutions deliver annual privacy notices to their clients.

Generally, under the GLBA, a registered investment adviser must provide its clients initial and annual privacy notices containing the following information:

  • the categories of nonpublic personal information that the firm collects about its clients;
  • the categories of nonpublic personal information about its clients that the firm may disclose to third parties;
  • the categories of affiliates and non-affiliated third parties to whom the firm discloses nonpublic personal information about its clients; and
  • the firm’s policies with respect to sharing nonpublic personal information about former clients.

With the passage of the FAST Act, a registered investment adviser is exempt from the GLBA requirement to deliver annual privacy notices to its clients if (1) the firm only shares nonpublic information with nonaffiliated third parties in a way that does not require the firm to grant the customer an opt-out right—e.g., the firm is not disseminating nonpublic information to nonaffiliated third parties for marketing purposes—and (2) the firm has not altered its policies and practices with respect to sharing nonpublic information about its clients. If the firm changes its privacy policies or practices, it would then need to deliver a new privacy notice to its clients.

The Fast Act amendment to the GLBA will necessitate that regulators amend their respective implementing regulations—including Regulation S-P, which applies to registered investment advisers. Nonetheless, the amendment took effect immediately and the exception it provides can be relied upon by registered investment advisers who qualify for such relief.