Week in Review: Reg BI Edition | 14 February 2020

Good day to everyone !

We have heard from many of you that the business pace has picked up considerably since an auspicious start in January. The news of the presidential election race and the spread of the coronavirus has overshadowed much of the early consternation of the trade banter with U.S international trade partners. The advisor engagement with clients continues to be focused more on downside risk. So let’s start our Reg BI edition of the Week in Review:

Regulation Best Interest

As the implementation date for Regulation Best Interest, June 30, 2020, is quickly upon us, there is an intensive focus from the advisor audience whether you’re a RIA, broker-dealer or dually-registered firm.

Anyone in a position to make “a recommendation to a retail customer must act in the best interest of the retail customer at the time of the recommendation is made, without placing your financial interest or other interest ahead of the retail customer’s interest.” This is a general obligation and is satisfied only if you’re in compliance with four specific complement obligations including disclosure, care, conflict of interest and compliance. 

Many advisors have reached out to us to help with this discussion and are looking for specific resources and tools to support this call to action. Note: anyone who is compensated directly or indirectly by an investment recommendation, whether or not the customer has an account at the firm, is impacted.

Consideration is given but not limited to:

  • The services and products provided in the account
  • The projected cost to the retail customer of the account
  • The services requested by the retail customer
  • The retail customer’s investment profile

Look at the policies and procedures of your administrative manual particularly those governing your customer qualification and investment processes. The standard of care, monitoring and documentation or recordkeeping are the key areas.

Firms that have been operating under this standard are confident that they’re aligned with it. It is the type of regulatory change where the invested time to review and assess the detailed provisions is paramount. If you haven’t already, reach out to any third parties that you engage with some or all of these processes to determine their function and compliance.

Stay tuned to our website and blog for insights from us and selected industry subject matter experts.


Here are the posts most read on Portformer.com

Question of the Week:

What steps are you taking to ensure staff is fully adopting the technology stack that you have invested in ?

Please share with us via our chatbox at Portformer or reply to this email and the information will remain confidential.

What We’re Reading:

Here is a snapshot of the best articles compiled and read by our team:

Hedge-Funds Have Almost Never Delivered on Their Promises. Why are Investors Bailing Now This is a refresher on the anticipated impact of hedge funds based on their performance during the Dotcom crash.

SEC Provides Further Guidance on Reg BI Compliance– Quick article that summarizes further guidance from the SEC to help firms with their Reg BI compliance.

10 Billion or Nowhere – ETF analysts clash over the Anticipation of the Active, Non-Transparent Funds– A lively debate between two analysts over the anticipated success of the emerging non-transparent ETFs and the impact to the mutual fund business.

Business Planning: Operational Excellence Drives Sales Growth– Excellent discussion from an industry expert on how a client service problem is more likely to jeopardize a client relationship than underperformance.  

The Most Efficient Marketing Strategies for Client Acquisition– Another classic article from Michael Kitces spelling out some of the most efficient advisor marketing strategies and cutting through to the real cost of a new client.  

To Compete with Robos, The Advisor Must Become a Financial Physician Engaging article from the CFA institute on how advisors must embrace more of the emotional work with clients to become “financial physicians”.  

If you have any difficulty accessing these articles and papers, please reach us through our website or directly at john.dibenedetto@portformer.com.  

As always, we welcome sharing this with a colleague who would benefit from joining our community or you can find us on social media at Twitter @Portformer and LinkedIn at Portformer


Sean Kruzel and the Portformer™ Team

John DiBenedetto

Sales | Business Development | Customer Success

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