The Regulators Are Here

Posted by Mark Piquette on November 12, 2013

Who’s that knocking at the door? If you’re an RIA who’s never hosted an examiner from the Securities and Exchange Commission, you may be in for an unwelcome surprise. According to an article in this week’s InvestmentNews, The Securities and Exchange Commission plans to make examining the estimated 4,000 advisers who have never been visited by regulators an enforcement priority next year. InvestmentNews quotes Andrew J. Bowden, director of the SEC's Office of Compliance Inspections and Examinations, as saying: “We're going to take a swipe at that (never-been-examined-before) population next year…The probability that you will be examined next year probably is greater than it was this year or in prior years.” Bowden’s declaration is the latest sign of an increasingly complicated landscape of regulations enforced by tougher regulators. An SEC unit targeting investment advisors took a record 147 enforcement actions against advisors in 2012, a 30% increase over enforcement activity in 2010 and double the number of actions taken a decade earlier. But the SEC isn’t the only regulator with which financial advisors must comply; each state also has its own set of regulations advisors must follow. The ultimate test of an advisor’s knowledge of regulations—and the ultimate test an of advisor’s business—is the regulatory exam. What’s an advisor to do? Fortunately, Trust Company of America’s Chief Compliance Officer has some answers. Jones hosts two webinars— one focused on learning how to survive regulatory exams, and another on how to handle the exit meeting and subsequent contact with regulators. The webinars provide a succinct guide to the exam process, tackling such topics as:

  • Knowing the different types of exams
  • Complying with document requests
  • Preparing for the exit meeting
  • Responding to the final examination letter
  • Common compliance issues

RIAs need to be prepared for greater scrutiny. The overview provided by Jones gives RIAs—whether new to regulatory exams, or a veteran of the process—a solid base of knowledge when going into a review.

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