Investment Adviser Association Identifies Top Compliance Concerns For Advisors This Year

Wednesday, August 03, 2011 07:18
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Investment Adviser Association Identifies Top Compliance Concerns For Advisors This Year

Tags: compliance

Social networking made the list of advisors' biggest compliance headaches this year. So did pay-to-play political contributions, data security, custody, and advertising issues.

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A recent survey of advisors reveals what topics are top priority for the industry's compliance officers.

 

It turns out that 42% of the firms out there are paying more attention to data security and advertising activities. Slightly fewer are taking a closer look at custody and personal trading on the part of employees.

 

Remarkably, 58% reduced their testing in at least one area, but sadly the results don't tell us what that area of lower concern was -- maybe Form ADV, Part 2, where a plurality of firms out there say they haven't changed their practices one bit.

 

Most firms now have written social networking policies in place while a full 70% have some form of rule governing political donations for employees and their families.

 

The survey was conducted by the non-profit Investment Adviser Association, compliance service provider ACA Compliance Group, and Old Mutual Asset Management.

 

For advisors looking to compare their best compliance practices against the industry, it's a gold mine of information. What I've written here barely scratches the surface. 

 

Example: 70% of all the advisory firms who took part in the survey spotted at least one compliance problem last year. Most were minor, but about one in ten was serious -- and the number of serious problems rose with the size of the compliance team.

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