All advisers registered with the SEC must adopt and enforce a written code of ethics reflecting the adviser’s fiduciary duties to its clients. The firm’s code of ethics is required to meet minimum standards to appropriately address conflicts of interest identified by the firm. To ensure compliance with the code of ethics requirements, a written acknowledgement should be obtained from each supervised person confirming receipt of the firm’s code of ethics. Firms with more than one access person are should also ensure transaction reporting is being done by all access persons.
As the baby boomer generation reaches retirement age, regulators have increased their focus on protecting senior investors. A new study released by the FINRA Investor Education Foundation (FINRA Foundation), in collaboration with researchers from Duke University and Rush University Medical Center suggests that overconfidence in financial knowledge may lead to excessive risk taking among older investors. This is a good time for your firm to sit down and review your accounts held by elderly clients and determine if their portfolio and investment strategy actually fits their needs.
COVID-19 has bought a “new normal”. From stay-at-home orders and teleworking requirements to market volatility, consumer worry, and delayed public disclosure, the face of the industry will be forever changed. In light of this, Registered Investment Advisor compliance departments should consider reviewing the landscape of the Code of Ethics requirements.