Investment Advisor Representative Archives - Page 4 of 4

Investment Advisor Representative Registration

Posted on February 12, 2021 by admin

Individuals looking to be in the business of giving investment advice for compensation will most likely need to register as an investment advisor representative (“IAR”). There are a couple of differences between becoming an IAR and a registered investment advisor(“RIA”). Most notably, only a natural person (a human being and not an entity) can be considered and IAR, and IARs never register with the SEC, only with the individual states. For an example of how to register with a state, check out the process for registering as an IAR with the state of Georgia on the Georgia Secretary of State’s website.

FINRA Rule 3241: Registered Person as Customer’s Beneficiary

Posted on February 10, 2021 by admin

On October 29, 2020 FINRA released a regulatory notice detailing Rule 3241, a new rule that limits any associated person of a member firm who is registered with FINRA from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust for or on behalf of a customer. The rule requires the member firm with which the registered person is associated, upon receiving required written notice from the registered person, to review and approve or disapprove the registered person assuming such status or acting in such capacity. Rule 3241 does not apply where the customer is a member of the registered person’s “immediate family, and becomes effective February 15, 2021

Acting in the Best Interest of Your Elderly Clients

Posted on February 8, 2021February 8, 2021 by admin

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.

The SEC Rule Change to Advisor Marketing Rules

Posted on February 5, 2021 by admin

In mid-December, the SEC adopted an amended rule to the advisor advertising rule and cash solicitation rule to reflect market developments and regulatory changes since the advertising rule’s adoption in 1961 and the cash solicitation rule’s adoption in 1979. These amendments will be the first substantive change to either rule since their inception and will create a new merged rule, The Marketing Rule, that will replace both the current advertising and cash solicitation rules.

Originally, the advisor advertising rule and cash solicitation rule were designed mainly for media such as television, radio, and newspapers. But a lot has changed since 1961 with the evolution of advertising and referral practices, advancements in technology, the introduction of the internet, and more. The Commission recognized this, stating that the new rule recognizes these changes and will “contain principles-based provisions designed to accommodate the continual evolution and interplay of technology and advice”. A few notable outcomes from this are the new rule applying to online outreach, such as adviser marketing over social media, and allowing for testimonials and endorsements.

Our Top 5 Blogs of 2020

Posted on January 29, 2021 by admin

MasterCompliance continues to provide clients and the public with guidance on industry focus areas, new rules, compliance foundations, and regulatory priorities. This blog explores our top 5 blogs of 2020.

NASAA’s New Rule on IAR CE

Posted on January 15, 2021February 8, 2021 by SCM Communications

The North American Securities Administrators Association (“NASAA”) recently adopted a new rule that will require Investment Advisor Representatives (“IARs”) to complete 12 credit hours of Continuing Education annually, 6 for IAR Ethics and Professional Responsibility Requirements and 6 for IAR Products and Practice Requirements. This will be the first time IARs have been subject to Continuing Education and as NASAA president Lisa A. Hopkins states, is intended to “promote heightened regulatory compliance while also helping investment adviser representatives better serve their clients by remaining knowledgeable of current regulatory requirements and best practices.”