Time for Reform in the RIA Industry?

Posted on December 11th, 2015 at 1:38 PM
Time for Reform in the RIA Industry?

From the Desk of Jim Eccleston at Eccleston Law LLC:

SEC oversight of registered investment advisers is not robust.  Each firm is examined once every 11 years on average, and 40% of firms never have been subject to an examination.  In an industry that depends on trust and confidence, a lack of sufficient oversight leaves RIAs vulnerable to reputation risk.

FINRA recently has pointed to a trend in the RIA industry which it calls a “regulatory arbitrage”.  FINRA suggests that unscrupulous brokers are finding their way into the less regulated RIA industry.  Those announcements serve to tarnish the reputation of the RIA industry and members are beginning to see the need for reform.  

Finding an alternative to SEC examinations has proven difficult.  One alternative is that the RIAs would join a self-regulatory organization, whether it be a broadened FINRA or a new agency.  Another option is third-party examination.  That system would require RIAs to subject themselves to an independent audit, and to do so on a more frequent basis than what the SEC does now.  The SEC still would maintain control and oversight as the cop on the beat.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: Eccleston, Eccleston Law, Eccleston Law LLC, James Eccleston, FINRA, Eccleston, SEC, FINRA, RIA

Return to Archive

TESTIMONIALS

Previous
Next

I just wanted to say thanks again for preparing and executing my case in such a professional manner. It was a pleasure to watch two professionals take such pride in their work, as well as becoming personally in tune with your client (Me). I would personally recommend you and your firm to anyone.

John O.

LATEST NEWS AND ARTICLES

October 26, 2021
Former Advisor Fails To Reverse Bar After Alleged $1 Million Theft From RBC

A former RBC Wealth Management advisor lost his bid to reverse an industry bar, according to an appellate decision issued by the Financial Industry Regulatory Authority (FINRA).

October 25, 2021
Firms Walk Thin Regulatory Line In Referring Self-Directed Clients To Advisors

While online trading platforms have surged in popularity during the pandemic, brokerage firms view self-directed investors as a source of new clients.

October 22, 2021
TIAA Sues Former Advisors For Allegedly Soliciting Clients

Teachers Insurance and Annuity Association of America (TIAA) filed suit against three of its former Connecticut advisors for allegedly soliciting TIAA clients to join them at their new firm.