The SEC issued an order that raises, to adjust for inflation, two of the thresholds that determine whether an investment adviser can charge its clients performance fees. The order carries out a requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Rule 205-3 under the Investment Advisers Act allows an investment adviser to charge a client performance fees if the client meets certain criteria, including two tests that have dollar amount thresholds. The SEC has now rasied the dollar amounts and now an investment adviser will be able to charge performance fees if the client has at least $1 million under the management of the adviser, or if the client has a net worth of more than $2 million. Either of these tests must be met at the time of entering into the advisory contract. The previous thresholds were $750,000 and $1.5 million respectively, and were last revised in 1998.
The Dodd-Frank Act requires that the Commission issue an order to adjust for inflation these dollar amount thresholds by July 21, 2011 and every five years thereafter. The Commission published a notice of its intent to issue the order on May 10, 2011. The Commission also proposed amendments to rule 205-3, which are currently under consideration.
The order will be effective on September 19, 2011, which will be approximately 60 days after its publication in the Federal Register.
Tampilkan postingan dengan label Advisers. Tampilkan semua postingan
Tampilkan postingan dengan label Advisers. Tampilkan semua postingan
No Fund for States to Oversee Advisers?
Senin, 21 Juni 2010 0 komentarIf the legislation that is currently moving through Congress passes, state regulators will take responsibility for the oversight of all investment advisers who manage less than $100 million dollars, a change from the current benchmark of $30 million dollars.
While the state regulators have been pushing hard to increase their power through this piece of legislation, there is one small problem - they don't have the funds to regulate all of these additional advisers.
State Advisor Regulation Strains Budgets
While the state regulators have been pushing hard to increase their power through this piece of legislation, there is one small problem - they don't have the funds to regulate all of these additional advisers.
State Advisor Regulation Strains Budgets
Bad Advice -Ignore FINRA Social Media Guidance
Jumat, 05 Februari 2010 0 komentar
Securities regulation is a big deal for those in the industry. The mix of rules, regulations and regulators is a dangerous web of potential violations, fines and suspensions. But those who are in the industry know that the regulators are serious, that they are looking for violations, and will bring actions for those violations.
Maybe it is a sign of the Madoff times, but I can't help but shutter when I read comments from supposedly educated and experienced people who comment on rules and regulations. We all know that FINRA has released its social media guidelines. And we know that like most topics, there can be more than one opinion on the impact of new pronouncements.
Some think that the guidelines are too vague, and therefore meaningless. The vagueness that they are referring to is a desire to meet two goals - first to insure that new rules and regulations address a wide range of situations, and second, to allow firms to create their own supervisory system to meet the challenges of their particular mix of issues. For the inexperienced, bright line tests are better because they are easier. The experienced prefer principle-based regulation - tell me what you want to accomplish, and I will figure out the best way for me and my firm to get there.
But that claim of vagueness has led to another unfortunate, and potentially dangerous conclusion. From a legal blog today, talking about FINRA's social media guidelines:
I hope that any financial professional who is guided by that statement has my business card on his desk. He is going to need it shortly.
FINRA is taking this seriously, and is already requesting documents regarding the use of Facebook, LinkedIn and Twitter. It is not impossible for them to monitor the use of social media, they will do so, and will seek sanctions for misuse.
Maybe it is a sign of the Madoff times, but I can't help but shutter when I read comments from supposedly educated and experienced people who comment on rules and regulations. We all know that FINRA has released its social media guidelines. And we know that like most topics, there can be more than one opinion on the impact of new pronouncements.
Some think that the guidelines are too vague, and therefore meaningless. The vagueness that they are referring to is a desire to meet two goals - first to insure that new rules and regulations address a wide range of situations, and second, to allow firms to create their own supervisory system to meet the challenges of their particular mix of issues. For the inexperienced, bright line tests are better because they are easier. The experienced prefer principle-based regulation - tell me what you want to accomplish, and I will figure out the best way for me and my firm to get there.
But that claim of vagueness has led to another unfortunate, and potentially dangerous conclusion. From a legal blog today, talking about FINRA's social media guidelines:
Investing blogs seem to be eyeing the rules with a wary eye, but the consensus seems to be something a long the lines of "it's impossible for them to enforce this, and they're probably not going to be too aggressive anyway."
I hope that any financial professional who is guided by that statement has my business card on his desk. He is going to need it shortly.
FINRA is taking this seriously, and is already requesting documents regarding the use of Facebook, LinkedIn and Twitter. It is not impossible for them to monitor the use of social media, they will do so, and will seek sanctions for misuse.
Compensation Cuts Leads to Broker Transitions
Selasa, 19 Januari 2010 0 komentarIn my practice I have seen a huge increase in the number of wirehouse brokers who are changing firms, as those firms consolidate and attempt to increase their profits.
Unfortunately for some, the wirehouses are ramping up profits at the expense of their brokers, and ultimately, their customers. In all of the years that I have been representing wirehouse brokers, I have never seen such a large number of brokers who are being terminated on the basis of trumped up charges. I certainly understand the need and desire to run a compliant firm, and to weed out brokers who have difficulty following the rules. And I am aware that brokers, like everyone else, tend to downplay their own culpability in such matters. But really, some of these terminations are simply beyond the pale, and nothing more than an asset grab.
I have been saying for almost a decade that the wirehouses want to get rid of brokers and move their business model to salaried employees. See my column from the January 1998 issue of Research Magazine - Death of a Salesman. But now there is a new attack - lower payouts.
It started with the small producers - who can forget Bank of America's decision to cut payouts for brokers on the banking side by 50%, causing a exodus of brokers from the firm, and a mess of promissory note arbitrations.
Citigroup, never the friend to its brokers, apparently has plans to force its brokers into a fee based model, regardless of what the customers want, or need. In an article titled "FAs Disgruntled over New Comp Plan at Citi Personal Wealth Management", David Geracioti, the editor-in-chief of Registered Rep magazine, details the information he has received regarding this forced transition from broker to investment adviser.
As Mr. Gercioti points out, brokers are upset; and leaving. Just take a look at the discussion at the Advisor Forum at Registered Rep titled "Citi PWM Exodus" for a peek at what some brokers are facing, and thinking.
Certainly, in many instances, the fee based model works for customers, and brokers. In many cases, it aligns the interests of the broker with the interests of the customer, and both do well if the assets increase in value, without any selling pressure on the broker or the customer.
But it doesn't work well for everyone. Customers with fixed income accounts, customers who adjust their portfolios once a year, and a host of others, will pay lower fees with a commission based account. Unless of course you lower the management fee to less than a percent.
Citigroup would obviously love to get rid of brokers, and the payouts, and it just may get its wish. Brokers are leaving. If a broker wants to be an RIA, he certainly can do so without the heavy hand of a wirehouse.
Setting up an investment advisory firm, using the platform of a major broker-dealer like Fidelity, is not expensive, nor is it difficult. For the enterprising professional, it is an excellent business model. For an overview of what is involved, take a look at my article, Registration and Regulation of Investment Advisers at SECLaw.com and our update of the SEC publication, Guide to Broker-Dealer Registration.
Or, becoming an independent, and associating with an independent broker-dealer. Doing so lets brokers do exactly what they and their customers need - the flexibility to use a commission based model when appropriate, or a fee based model for those customers who need that model.
Some brokers are reluctant to go into business on their own, and certainly some customers will be reluctant to leave a "big" name like Citigroup. Brokers who stay may find their compensation continually reduced, being forced into teams, and their smaller accounts sent to a call center. Ultimately, the firms will keep the assets, and continue to have less overhead, and more profit, all to the detriment of the financial professionals who cultivated those relationships and serviced those clients.
Does the big name make a difference? I am sure it does. But given the recent financial crisis, are customers still impressed with those "big" name wirehouses? Do customers really believe that those firm offer better advice than an independent? Are they in better financial shape than their competitors? Aren't customers really relying on the relationship with their financial adviser?
Time will tell, but like the brokers in the Registered Rep forums and those who are calling my office, the outlook is not good.
Naturally, any move needs the assistance of professionals, including an experienced securities attorney. Creating an investment advisory firm is not difficult, but requires guidance through the regulatory maze. But all of that can be achieved with effort, and the cost is going to be less than the loss that you will incur over the course of a single month.
My firm offers free consultations to financial professionals who are seeking to change firms, join independents or to start their own RIAs or broker-dealers. Feel free to email me at astarita@beamlaw.com, or to call 212-509-6544 to discuss the possibilities.
More>>>
Unfortunately for some, the wirehouses are ramping up profits at the expense of their brokers, and ultimately, their customers. In all of the years that I have been representing wirehouse brokers, I have never seen such a large number of brokers who are being terminated on the basis of trumped up charges. I certainly understand the need and desire to run a compliant firm, and to weed out brokers who have difficulty following the rules. And I am aware that brokers, like everyone else, tend to downplay their own culpability in such matters. But really, some of these terminations are simply beyond the pale, and nothing more than an asset grab.
I have been saying for almost a decade that the wirehouses want to get rid of brokers and move their business model to salaried employees. See my column from the January 1998 issue of Research Magazine - Death of a Salesman. But now there is a new attack - lower payouts.
It started with the small producers - who can forget Bank of America's decision to cut payouts for brokers on the banking side by 50%, causing a exodus of brokers from the firm, and a mess of promissory note arbitrations.
Citigroup, never the friend to its brokers, apparently has plans to force its brokers into a fee based model, regardless of what the customers want, or need. In an article titled "FAs Disgruntled over New Comp Plan at Citi Personal Wealth Management", David Geracioti, the editor-in-chief of Registered Rep magazine, details the information he has received regarding this forced transition from broker to investment adviser.
As Mr. Gercioti points out, brokers are upset; and leaving. Just take a look at the discussion at the Advisor Forum at Registered Rep titled "Citi PWM Exodus" for a peek at what some brokers are facing, and thinking.
Certainly, in many instances, the fee based model works for customers, and brokers. In many cases, it aligns the interests of the broker with the interests of the customer, and both do well if the assets increase in value, without any selling pressure on the broker or the customer.
But it doesn't work well for everyone. Customers with fixed income accounts, customers who adjust their portfolios once a year, and a host of others, will pay lower fees with a commission based account. Unless of course you lower the management fee to less than a percent.
Citigroup would obviously love to get rid of brokers, and the payouts, and it just may get its wish. Brokers are leaving. If a broker wants to be an RIA, he certainly can do so without the heavy hand of a wirehouse.
Setting up an investment advisory firm, using the platform of a major broker-dealer like Fidelity, is not expensive, nor is it difficult. For the enterprising professional, it is an excellent business model. For an overview of what is involved, take a look at my article, Registration and Regulation of Investment Advisers at SECLaw.com and our update of the SEC publication, Guide to Broker-Dealer Registration.
Or, becoming an independent, and associating with an independent broker-dealer. Doing so lets brokers do exactly what they and their customers need - the flexibility to use a commission based model when appropriate, or a fee based model for those customers who need that model.
Some brokers are reluctant to go into business on their own, and certainly some customers will be reluctant to leave a "big" name like Citigroup. Brokers who stay may find their compensation continually reduced, being forced into teams, and their smaller accounts sent to a call center. Ultimately, the firms will keep the assets, and continue to have less overhead, and more profit, all to the detriment of the financial professionals who cultivated those relationships and serviced those clients.
Does the big name make a difference? I am sure it does. But given the recent financial crisis, are customers still impressed with those "big" name wirehouses? Do customers really believe that those firm offer better advice than an independent? Are they in better financial shape than their competitors? Aren't customers really relying on the relationship with their financial adviser?
Time will tell, but like the brokers in the Registered Rep forums and those who are calling my office, the outlook is not good.
Naturally, any move needs the assistance of professionals, including an experienced securities attorney. Creating an investment advisory firm is not difficult, but requires guidance through the regulatory maze. But all of that can be achieved with effort, and the cost is going to be less than the loss that you will incur over the course of a single month.
My firm offers free consultations to financial professionals who are seeking to change firms, join independents or to start their own RIAs or broker-dealers. Feel free to email me at astarita@beamlaw.com, or to call 212-509-6544 to discuss the possibilities.
More>>>
Nationwide Financial Tells Advisors To Find New BDs
Senin, 18 Januari 2010 0 komentarNationwide Financial has advised its independent financial advisers to find new broker-dealer relationships before April 30, according to Investment News.
The article states that the move is intended by Nationwide to focus its efforts on its proprietary sales force and to expand its insurance business.
Independent brokers have a number of choices for new affiliations, as there are any number of independent firms that are available, depending on the needs of the adviser and his clients. I would like to remind brokers that these agreements should be reviewed by an attorney prior to moving to a new firm, as there are a number of clauses which could cause difficulties down the road. While many brokers believe that employment agreements, promissory notes and related contracts are not negotiable, many are, depending on the circumstances. Additional consulting an attorney before entering into any type of agreement involving your career and clients is money well spent, if for no reason other than to prevent surprises down the road.
More>>>
The article states that the move is intended by Nationwide to focus its efforts on its proprietary sales force and to expand its insurance business.
Independent brokers have a number of choices for new affiliations, as there are any number of independent firms that are available, depending on the needs of the adviser and his clients. I would like to remind brokers that these agreements should be reviewed by an attorney prior to moving to a new firm, as there are a number of clauses which could cause difficulties down the road. While many brokers believe that employment agreements, promissory notes and related contracts are not negotiable, many are, depending on the circumstances. Additional consulting an attorney before entering into any type of agreement involving your career and clients is money well spent, if for no reason other than to prevent surprises down the road.
More>>>
Congress to Give FINRA Authority over RIAs
Senin, 02 November 2009 0 komentarAccording to InvestmentNews.com, there has been an amendment to the Investor Protection Act which gives FINRA authority over the advisory activity of any broker-dealer that it regulates.
The bill would affect anyone who is dually registered as an investment adviser and a broker, and would greatly expand FINRA's authority over the financial markets.
On one level the proposal makes sense. In recent years we have seen the distinctions between brokers and advisers blurr, and in the retail area, there often is no substantive difference between the two. At least not to the investor, who often does not know, nor does he care, whether his financial adviser is a stock broker or an investment adviser.
The most notorious example is Madoff, who, although presenting himself and his firm as a brokerage firm, was actually acting, or purporting to act, as an investment adviser. In that example, a distinction without a difference, and giving FINRA authority over the RIA side of the BDs business might have made a difference.
That is not to say that FINRA should have authority over all RIAs. There are thousands of investment advisers who are not brokers and who do not work for broker-dealers. Those adviser are now regulated by the states, or by the SEC, depending on how much money they manage.
The committee is scheduled to vote on the Investor Protection Act Nov. 4. According to InvestmentNews.com, it is likely to approve the bill. More>>>
Technorati Tags: finra
The bill would affect anyone who is dually registered as an investment adviser and a broker, and would greatly expand FINRA's authority over the financial markets.
On one level the proposal makes sense. In recent years we have seen the distinctions between brokers and advisers blurr, and in the retail area, there often is no substantive difference between the two. At least not to the investor, who often does not know, nor does he care, whether his financial adviser is a stock broker or an investment adviser.
The most notorious example is Madoff, who, although presenting himself and his firm as a brokerage firm, was actually acting, or purporting to act, as an investment adviser. In that example, a distinction without a difference, and giving FINRA authority over the RIA side of the BDs business might have made a difference.
That is not to say that FINRA should have authority over all RIAs. There are thousands of investment advisers who are not brokers and who do not work for broker-dealers. Those adviser are now regulated by the states, or by the SEC, depending on how much money they manage.
The committee is scheduled to vote on the Investor Protection Act Nov. 4. According to InvestmentNews.com, it is likely to approve the bill. More>>>
Technorati Tags: finra
Hedge Funds On Wall Street Talent Hunt
Jumat, 30 Oktober 2009 1 komentarFrom Financial Planning.com - Less than a year after the credit crisis forced the closure of some 1,000 hedge funds, these firms are back out looking for capital and hiring professionals from Wall Street firms. In addition to poaching from investment banks, the funds are bringing in professionals from endowments, foundations, and traditional asset managers, according to a recent report More>>>
SEC Charges Broker for Manipulation Using Internet
Senin, 26 Oktober 2009 0 komentarOnce again, the SEC is moving quickly. It is a welcome change, as they have always been known for closing the barn door after the horse has bolted.
Only three weeks after an alleged fraud began, the SEC charged a securities broker with securities fraud for repeatedly creating and then distributing fake press releases to manipulate the stock prices of multiple publicly traded companies.
The SEC alleges that the broker created press releases, including one that claimed that Google was buying the target company. He then posed as an investor on Internet message boards, touting the announcements he had fabricated. In one instance, his scheme caused the stock price to increase by nearly 80 percent within a few hours of the issuance of his phony press release.
Moving a stock 80% on an Internet posting is pretty amazing, and raises another question. Just how greedy, and gullible, are some investors? Someone posts news in an Internet forum, linking to a press release, and they buy the stock?
Investing is not that easy. There is due diligence that needs to be performed, and analysis that needs to be done. That is why investors use financial advisers, and not Internet investment forums, to make investment decisions.
More>>>
Only three weeks after an alleged fraud began, the SEC charged a securities broker with securities fraud for repeatedly creating and then distributing fake press releases to manipulate the stock prices of multiple publicly traded companies.
The SEC alleges that the broker created press releases, including one that claimed that Google was buying the target company. He then posed as an investor on Internet message boards, touting the announcements he had fabricated. In one instance, his scheme caused the stock price to increase by nearly 80 percent within a few hours of the issuance of his phony press release.
Moving a stock 80% on an Internet posting is pretty amazing, and raises another question. Just how greedy, and gullible, are some investors? Someone posts news in an Internet forum, linking to a press release, and they buy the stock?
Investing is not that easy. There is due diligence that needs to be performed, and analysis that needs to be done. That is why investors use financial advisers, and not Internet investment forums, to make investment decisions.
More>>>
Morgan Stanley Plans to Double High Net Worth Advisors
Jumat, 23 Oktober 2009 0 komentarMorgan Stanley Smith Barney announced the integration of Smith Barney’s Citi Family Office into its own ultra-high-net-worth division, which will now be called Morgan Stanley Private Wealth Management. Unlike the old family office, the newly combined unit will exclusively serve clients with a minimum of $20 million in assets. Morgan said it plans to add more advisors to PWM through a combination of “organic growth and selective acquisitions.” More>>>
RIA Assets Fall But Their Numbers Grow
Jumat, 02 Oktober 2009 0 komentarA recent report has confirmed what we suspected - brokers and groups of brokers are moving to the investment advisory side of the business, leaving FINRA and its regulatory nightmare behind them. FA Magazine is reporting that while total assets under management for advisers declined by more than 20%, which is no surprise, the total number of advisers has increased. More>>>
Advisors’ Job Attitude, Outlook Improves
Kamis, 01 Oktober 2009 0 komentarA new survey reveals that independent RIAs have seen their level of job satisfaction rise 10% and the number with an optimistic outlook for the U.S. economy has climbed by 25% over the past three months, according to a survey released by TD Ameritrade Institutional. Half of the 500 RIAs surveyed gave a top rating (9 or 10) to their satisfaction with their job, up from about 40% three months ago. More>>>
Registration and Regulation of Investment Advisers
Rabu, 30 September 2009 0 komentarIncreased regulation, and a push for more regulation by FINRA and the States is causing brokers and small firms to move the to investment advisory side of the business. While regulations are going to change here too, there are benefits to the adviser registration, rather than dealing with FINRA. More>>>
NASAA Power Grab With a Punch
Rabu, 16 September 2009 0 komentar
As referenced earlier today the NASAA is pushing hard to regain its power and authority over the financial industry, and isn't being shy about it. We wrote eabout their push to increase the ceiling for state registered investment advisers from $25 million to $100 million, which will put financial regulation back at least a decade.
In another story today, the NASAA actually took a shot at its fellow regulators. The incoming NASAA president is quoted as saying, referring to the current financial collapse - "While this catastrophe was the result of many failures, I am very proud to say that a failure of state securities regulation was not one of them. In the last few years, it has been state and provincial securities regulators who have been at the forefront of investor protection. Our record demonstrates clearly that we have the will and ability to regulate."
While it is nice to pat yourself on the back, stepping on your fallen colleagues to gain an advantage is not the way most folks do business. Particularly when the pats on the back are not deserved.
While no one would claim that the state regulators were responsible for the financial crisis, they certainly missed some important parts of that collapse. Lets not forget that most, if not all of the state regulators who comprise the NASAA had regulatory authority over Madoff, Lehman, Bear Stearns and Merrill Lynch. Each had the ability, and dare I say some had the obligation, to review the books and records of each of those firms.
I am not suggesting that they should have conducted full audits of the firms, heck I will even give them a pass on missing all of these issues that were under their jurisdiction. Let's face it, they simply do not have the funds or staff to meet their obligations. But they do have the statutory authority, to oversee brokerage firms that are operating in their states. It is therefore disingenuous for their president to now say "everyone else missed the boat, we didn't and we could do it better."
We spent years attempting to consolidate the regulatory nightmare that is known as securities regulation. Giving new powers, and new jurisdiction to 50 regulators is not the way out of the financial crisis - unless of course the plan is to put the brokerage firms and investment advisory firms out of business under a bureaucratic nightmare of duplicative filings, fees, audits, examinations and enforcement proceedings.
In another story today, the NASAA actually took a shot at its fellow regulators. The incoming NASAA president is quoted as saying, referring to the current financial collapse - "While this catastrophe was the result of many failures, I am very proud to say that a failure of state securities regulation was not one of them. In the last few years, it has been state and provincial securities regulators who have been at the forefront of investor protection. Our record demonstrates clearly that we have the will and ability to regulate."
While it is nice to pat yourself on the back, stepping on your fallen colleagues to gain an advantage is not the way most folks do business. Particularly when the pats on the back are not deserved.
While no one would claim that the state regulators were responsible for the financial crisis, they certainly missed some important parts of that collapse. Lets not forget that most, if not all of the state regulators who comprise the NASAA had regulatory authority over Madoff, Lehman, Bear Stearns and Merrill Lynch. Each had the ability, and dare I say some had the obligation, to review the books and records of each of those firms.
I am not suggesting that they should have conducted full audits of the firms, heck I will even give them a pass on missing all of these issues that were under their jurisdiction. Let's face it, they simply do not have the funds or staff to meet their obligations. But they do have the statutory authority, to oversee brokerage firms that are operating in their states. It is therefore disingenuous for their president to now say "everyone else missed the boat, we didn't and we could do it better."
We spent years attempting to consolidate the regulatory nightmare that is known as securities regulation. Giving new powers, and new jurisdiction to 50 regulators is not the way out of the financial crisis - unless of course the plan is to put the brokerage firms and investment advisory firms out of business under a bureaucratic nightmare of duplicative filings, fees, audits, examinations and enforcement proceedings.
The Power Grab Continues
0 komentar
It seems like everyone is trying to gain power and control using the Madoff Mess as a justification. The North American Securities Administrators Association (the state securities commissioners) is pushing for authority over all investment advisors who manage less than $100 million in assets.
Today they only have authority over those with less than $25 million in assets, and if this power grab is successful, it will be one giant step backwards for the securities industry and the investing public. We spent decades attempting to consolidate regulators so that large national firms did not have to deal with 50 state regulators. The move to divide investment managers into state vs. SEC registrations was part of that consolidation process. The $25 million dollar cut off left the smaller RIAs with the states. Since smaller RIAs only need to register with a handful of states, that division made sense.
By increasing their jurisdiction there will be a significant increase in RIAs who need to be state registered, and those RIAs will have to register in all 50 states, and make filings in all 50 states, and comply with the rules and regulations in all 50 states. Not only do the states have different rules and filing requirements, the cost of maintaining registrations will increase dramatically.
At the same time, the SEC is simply not going to be able to oversee all of the new RIAs if pending legislation passes. The SEC has clearly demonstrated its inability to oversee the regulated entities that it is currently responsible for. If we are going to have meaningful regulation of investment advisers, a new entity needs to be created, similar to FINRA, or the SEC needs significantly more staffing and funding. Turning the regulation over to 50 state regulators will be a nightmare, one that we finally removed years ago.
Today they only have authority over those with less than $25 million in assets, and if this power grab is successful, it will be one giant step backwards for the securities industry and the investing public. We spent decades attempting to consolidate regulators so that large national firms did not have to deal with 50 state regulators. The move to divide investment managers into state vs. SEC registrations was part of that consolidation process. The $25 million dollar cut off left the smaller RIAs with the states. Since smaller RIAs only need to register with a handful of states, that division made sense.
By increasing their jurisdiction there will be a significant increase in RIAs who need to be state registered, and those RIAs will have to register in all 50 states, and make filings in all 50 states, and comply with the rules and regulations in all 50 states. Not only do the states have different rules and filing requirements, the cost of maintaining registrations will increase dramatically.
At the same time, the SEC is simply not going to be able to oversee all of the new RIAs if pending legislation passes. The SEC has clearly demonstrated its inability to oversee the regulated entities that it is currently responsible for. If we are going to have meaningful regulation of investment advisers, a new entity needs to be created, similar to FINRA, or the SEC needs significantly more staffing and funding. Turning the regulation over to 50 state regulators will be a nightmare, one that we finally removed years ago.
Changes at the SEC. Benefit to Advisers?
Kamis, 06 Agustus 2009 0 komentar
When President Obama appointed FINRA chief Mary Schapiro as the new Chairman of the Securities and Exchange Commission, the nation was promised an overhaul of the agency and of securities regulation in general. Given the turmoil created by the financial meltdown and the Bernard Madoff mess, we are seeing those changes happen very quickly.
Indeed, we are seeing new rules and proposals, including the re-introduction of short-selling restrictions, increasing calls for registration of investment advisors and more tinkering with rules regarding the operation of public companies. At the same time, there is a renewed effort to toughen the enforcement of existing rules and regulations.
The real question for you is: How will these changes affect individual advisors? More>>>
Indeed, we are seeing new rules and proposals, including the re-introduction of short-selling restrictions, increasing calls for registration of investment advisors and more tinkering with rules regarding the operation of public companies. At the same time, there is a renewed effort to toughen the enforcement of existing rules and regulations.
The real question for you is: How will these changes affect individual advisors? More>>>
Financial Advisers Change Their Business Approach
0 komentarThere are some interesting, but not surprising, survey results at InvesmentNews.com. A recent industry survey of financial advisers reflects a clear change in the way they do business.
InvestmentNews.com's summary of the survey is at its website, in an article titled "Downturn has changed the way most advisers do business, survey indicates".
Fifty-seven percent of advisers indicated that the crisis had had a “large impact” on their business. A full 60% said they had met or spoken more frequently with clients to help them manage their investments, and 46% of advisers were recommending different products than they had previously. These products were generally more conservative, the survey found. More>>>
InvestmentNews.com's summary of the survey is at its website, in an article titled "Downturn has changed the way most advisers do business, survey indicates".
Fifty-seven percent of advisers indicated that the crisis had had a “large impact” on their business. A full 60% said they had met or spoken more frequently with clients to help them manage their investments, and 46% of advisers were recommending different products than they had previously. These products were generally more conservative, the survey found. More>>>
New Plan to Register Investment Advisers
Senin, 03 Agustus 2009 0 komentarThe Obama Administration is proposing legislation that will remove the exemptions from registration enjoyed by managers of private investment partnerships and hedge funds. The legislation will require the registration of virtually all investment advisors who operate from the United States, or who provide services to United States citizens, and who manage over $25 million in assets. More details and commentary are at SECLaw.com - New Plan to Register Investment Advisers.
FINRA's Ketchum Acknowledges Lack of Confidence, Calls for More Regulation
Jumat, 19 Juni 2009 0 komentarHe references the erosion of investor confidence after the market collapse and the arrest of Madoff, causing some to wonder, "given his status as a respected veteran of the securities industry, many investors were left to wonder if he was truly an outlier, or emblematic of how the industry operates."
Interesting comment from a long term FINRA insider and the now-CEO of one of the requlators who let that fraud go on under their noses for decades.
Does Mr. Ketchum fall on his sword and resign? No. Incredibly he calls for more regulation, and pushes again to gain regulatory control over investment advisors.
FINRA - Remarks by Chairman and CEO Rick Ketchum From the Exchequer Club
Interesting comment from a long term FINRA insider and the now-CEO of one of the requlators who let that fraud go on under their noses for decades.
Does Mr. Ketchum fall on his sword and resign? No. Incredibly he calls for more regulation, and pushes again to gain regulatory control over investment advisors.
FINRA - Remarks by Chairman and CEO Rick Ketchum From the Exchequer Club
Administration Plans Fiduciary Standard for Brokers
Rabu, 17 Juni 2009 0 komentarAnd it begins. A market crash, a major ponzi scheme, and new regulations. The Obama administration announced today that it will propose to establish a fiduciary duty for broker-dealers offering investment advice and harmonize the regulation of investment advisors and broker-dealers.
The move is being praised by investment advisor organizations and by consumer groups, but the entire debate is something of a tempest in a teapot. Brokers are not fiduciaries when they act as brokers, but the distinction has, for the most part, been lost over the years, as brokers take a more advisory role in their relationship with their customers, and many brokers today offer advisory services to their customers.
The interesting part of the announcement was FINRA's response. According to InvestmentNews.com, FINRA's President hailed the call for harmonization. He also pushed for putting investment advisors under FINRA regulation. With 25,000 investment advisory firms in the country, FINRA has not explained how it is going to regulate 25,000 new firms when it cannot properly regulate the 5,000 or so broker-dealers that it is currently charged with responsibility for regulating.
The quote from FINRA is priceless - “Finra is uniquely positioned to build an oversight program that ensures investment advisers are properly examined and their customers are adequately protected."
Madoff's firm was under FINRA's jurisdiction, and is currently in SIPC liquidation because his massive fraud was not discovered by FINRA or the SEC, both of which had jurisdiction over him.
Obama administration to create a fiduciary standard for broker-dealers - Investment News
The move is being praised by investment advisor organizations and by consumer groups, but the entire debate is something of a tempest in a teapot. Brokers are not fiduciaries when they act as brokers, but the distinction has, for the most part, been lost over the years, as brokers take a more advisory role in their relationship with their customers, and many brokers today offer advisory services to their customers.
The interesting part of the announcement was FINRA's response. According to InvestmentNews.com, FINRA's President hailed the call for harmonization. He also pushed for putting investment advisors under FINRA regulation. With 25,000 investment advisory firms in the country, FINRA has not explained how it is going to regulate 25,000 new firms when it cannot properly regulate the 5,000 or so broker-dealers that it is currently charged with responsibility for regulating.
The quote from FINRA is priceless - “Finra is uniquely positioned to build an oversight program that ensures investment advisers are properly examined and their customers are adequately protected."
Madoff's firm was under FINRA's jurisdiction, and is currently in SIPC liquidation because his massive fraud was not discovered by FINRA or the SEC, both of which had jurisdiction over him.
Obama administration to create a fiduciary standard for broker-dealers - Investment News
Langganan:
Postingan (Atom)
.jpg)
