Eric Clarke, chief executive officer for Orion Advisor Solutions (Orion), was interviewed for Financial Planning’s Lightning Round. In the interview, Clarke describes the greatest threat to independent advisors as changes occur in the regulatory landscape.
Clarke describes utilizing technology to efficiently comply with regulatory changes as a challenge and also ability for firms to differentiate themselves in an already competitive market. Regulatory changes like REG BI make it increasingly difficult for RIAs to differentiate themselves from broker dealers.
Clarke describes the automated advice landscape now as very investment centric and envisions a near future transition toward planning centric advice and eventually toward client experience.
Financial Planning’s Lightning Round features a collection of one-minute interviews with industry leaders. Clarke is an advocate for advisory professionals who has been published in Investment News and The Journal of Financial Planning. He received Investment News’ Icon & Innovators Award in 2019.
Avoiding Enforcement Actions and Preparing for Regulatory Changes
Core Compliance & Legal Services believes the biggest threat to RIAs is a general lack of understanding of regulatory changes and proper implementation in firm compliance programs. Referring to the SEC’s Division of Enforcement’s Annual Report, he notes that there were 191 standalone actions that were investment advisor/investment company related, a substantial uptick from 2018.
The enforcement actions from 2019 have demonstrated that a primary focus of the SEC has been protecting the retail investor. Firms looking to avoid regulatory actions in 2020 should make sure they have reviewed and understand actions taken by the SEC in 2019 and are not at risk for similar actions.
For more analysis on the SEC’s Division of Enforcement’s Annual Report, tune in to the CCO Buzz podcast episode.
The retail investor is also the primary focus in the REG BI regulatory package, which is scheduled for a compliance deadline of June 30, 2020. The SEC is likely to take action against firms who have not properly begun to comply with REG BI requirements. It is therefore crucial that your firm has read and begun planning for implementation of REG BI. The time and financial commitment required for compliance will depend on the size and the policies and procedures established by each individual firm, but it is critical that advisors allocate ample time to prepare for the compliance deadline.
Core Compliance and Legal Services, Inc. and its team of experts may help your firm to prepare for compliance for regulatory changes by evaluating your current policies and procedures and disclosure documents, preparing your teams for required changes, and assisting with training employees. Contact our team of experts today.