Archive for the ‘MarketCounsel’ Category

Nevada Imposes its Own Fiduciary Duty on Broker-Dealers and Advisers

Thursday, June 22nd, 2017

The State of Nevada has imposed, effective July 1, 2017, its own fiduciary duty on investment advisers and broker-dealers (the “Law”).  Nevada’s Law is novel because: (i) it is the first time that a state has imposed a fiduciary duty on broker-dealers and their representatives and (ii) because it does not contain an exemption for SEC registered investment advisers, broker-dealers, and their representatives.

It is clear that investors are confused by the duties owed by investment firms, be they broker-dealers, investment advisers, or insurance producers.  The DOL fiduciary rule further clouded the differences since the same individual (broker) may have a different duty to the client depending on whether an account is a retirement account or not.  Dodd-Frank gave the SEC the ability to impose a fiduciary duty on brokers and the Commission has discussed doing so (or not) for years.  We expect that other states will follow Nevada’s lead and engage in state activism until the SEC makes a determination to pursue a fiduciary duty for brokers, or has at least affirmatively declines to pursue such a rule.

Members of MarketCounsel’s compliance management programs can find more information on the Law, including the enforceability and requirements of the Law, on RIAglass.

Focus on Fiduciary Standard Puts Adviser Negligence in Spotlight. @HDelux talks with @FinancialTimes.

Thursday, June 22nd, 2017

Negligence claims are a risk for financial advisers of all stripes. “The first step is to be completely aware of all conflicts of interests — and if you can’t avoid or minimize them, you must disclose all of them,” says Brian Hamburger, president and CEO of MarketCounsel, a business and regulatory consulting firm for investment advisers. He warns that disclosure alone does not satisfy the requirement that an adviser has acted in the client’s best interest. Investors need to be engaged in the process and have a full understanding of all products and decision-making.

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As DOL Fiduciary Rule Takes Effect, the Focus is on Compliance. @DanBernstein talks with @GregIacurci (@newsfromIN).

Monday, June 12th, 2017

“I think you’ll find different reactions over the next two to three months by firms,” said Daniel Bernstein, chief regulatory counsel at compliance consulting firm MarketCounsel. Some who are “pretty much at the finish line” already will continue on their trajectory, while “some will put their head in sand” until there’s clarity, Mr. Bernstein added. While the DOL has indicated it will not enforce the fiduciary rule in the interim as long as companies are “working diligently and in good faith to comply,” Mr. Bernstein said firms shouldn’t read this as a signal they can sit on their hands. “What may work today may not be deemed diligent and in good faith four months from now,” he said. MarketCounsel is an Englewood, N.J.-based firm that specializes in helping brokers transition to independence.

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The Fiduciary Rule Goes Live at Long Last. @BarronsOnline features @HDelux as contrarian.

Tuesday, June 6th, 2017

There will be holdouts. “By and large, absent a government mandate, you’ll find firms holding strong and trying not to deliver advice under a fiduciary standard,” predicts Brian Hamburger, president and CEO of MarketCounsel, a business and regulatory consulting firm for investment advisors. He believes most firms will stick to the status quo unless forced to change, because the old ways are more profitable.

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What to make of Goldman Sachs losing talent? Marc Cohen (@mcohen429) talks with @RIABiz

Tuesday, June 6th, 2017

While I’m unable to comment on any specific transaction, we have seen a significant uptick in activity out of Goldman Sachs and other private banks over recent months, which has led to a massive flow of assets to independence,” he says. “Of course, these transitions also carry with them increased risk for the transitioning advisors as they are generally conducted without the protections of the Broker Protocol.”  MarketCounsel is an Englewood, N.J.-based firm that specializes in helping brokers transition to independence.

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DOL Fiduciary Rule Compliance: Phase I, effective June 9th

Thursday, May 25th, 2017

Certain portions of the DOL’s fiduciary rule under ERISA will become effective on June 9, 2017. Although enforcement of the rule will not begin until January 1, 2018 so long as there’s good faith effort, most investment advisers will find compliance easy.  The imminent provisions expand the definition of “fiduciary investment advice” under ERISA.  That definition will now include recommendations with respect to the rollover, transfer or distribution of assets from one retirement plan to another.  Investment advisers should confirm that they continue to make rollover recommendations that are in the best interest of their clients.  Additionally, advisers need to implement certain disclosures to clients under ERISA.

Members of MarketCounsel’s compliance management programs can find more information on the Rule, including effective dates, exemptions, and sample disclosures on RIAglass.

 

We’re growing our team! Know someone with great practical compliance skills? #jobs

Monday, May 22nd, 2017

See details at https://cnsl.me/practicalcnsl

SEC Releases Cybersecurity Ransomware Alert

Monday, May 22nd, 2017

On May 17, 2017, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) released a National Exam Program Risk Alert regarding the widespread WannaCry ransomware attack.  The hackers behind the attack are gaining access to servers either through Microsoft Remote Desktop Protocol or the exploitation of a Windows vulnerability.  Supposedly, some networks have also been affected through phishing emails and malicious websites.

The Alert encouraged advisers to review an alert published by the US Department of Homeland Security’s Computer Emergency Readiness Team, and evaluate whether applicable Microsoft patches are properly and timely installed.  The Alert also reminded advisers of other guidance provided by the SEC on cybersecurity preparation.

Members of MarketCounsel’s compliance management programs can find more information on the Ransomware Alert and other cybersecurity articles on RIAglass.

“Who’s going to make sure there’s coffee in the break room?” @HDelux asks breakaway advisors who want their own firm via @bobveres @finplan

Friday, May 5th, 2017

Brian Hamburger and Sharron Ash sit down with Bob Veres to discuss what wirehouse advisors must know before going indie.  You’re going to want to read this.

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@HdDelux to @finplan: “Broker-dealers are under fire – what they’re selling has fallen out of favor.”

Friday, May 5th, 2017

“They’ll continue to find lucrative hunting grounds for broker-dealers,” says Brian Hamburger, president and CEO of MarketCounsel, a legal and compliance firm.  “Broker-dealers are under fire,” he says. “What they’re selling — let’s be blunt about it, it’s fallen out of favor.”

Hamburger has observed a shift in how the SEC has handled enforcement over the last year or so. He says that he has seen SEC enforcement staffers get involved earlier in the examination process — what he described as “pre-enforcement.”  Where there was previously “a very clear line between examination or investigation and enforcement,” he says , “we’re seeing that line really blurred over the last several months.”  Now, following an examination, it is common for an examiner to summon a firm’s principals to an SEC office for a meeting attended by enforcement attorneys, creating a “slippery slope between examination and enforcement that we didn’t used to have to deal with,” he says.

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