NASAA Highlights Common Violations by State-Registered Investment Advisors
From the desk of Jim Eccleston at Eccleston Law
State securities regulators took significant enforcement actions in 2023, with many cases stemming from breaches of fiduciary duty and failures to register, according to the North American Securities Administrators Association (NASAA).
According to ThinkAdvisor, NASAA highlights, that among 16,897 state-registered investment advisors, the leading causes of enforcement actions in 2023 included:
- Failure to register as an investment advisor or representative
- Fraud
- Breach of fiduciary duty and failure to disclose conflicts of interest
- Non-compliance with existing policies and procedures
- Violations of suitability rules
- Fee-related issues
- Failure to disclose disciplinary actions
The NASAA report emphasizes that most state-registered firms primarily serve retail investors (74%), followed by high-net-worth clients (18.9%). Of these firms, 84.1% offer portfolio management services, and 64.8% provide financial planning services.
State securities regulators oversee firms managing assets under $100 million, and most enforcement actions center on ensuring firms adhere to basic registration and compliance standards.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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