An onsite examination from the SEC can often feel like a surprise visit from your in-laws. You wish you had more time to clean up before they arrived, you know they’re judging you the whole time they’re there, and you can’t wait for the moment you get to say goodbye.
And, after what seems like
So you’ve built your robo-adviser, registered it, hired and licensed personnel, implemented a compliance program, conducted a successful marketing campaign, and (finally) gotten to do what you’ve really wanted to do the whole time – advise clients and manage portfolios. Startup woes seem a thing of the past, and your operation is running smoothly.
Then,
As Marc mentioned last time, the SEC’s Division of Examinations’ (EXAMS) has made it a priority in 2021 to review the steps that firms take to ensure information security and operational resiliency. For robo-advisers, given that they conduct so much of their operations online, these steps are of paramount importance.
In its report, EXAMS
Robo-advisory firms often build client portfolios with exchange-traded funds (ETFs) and mutual funds. This makes practical sense – these instruments allow advisers to efficiently meet a wide range of client investment objectives. Nevertheless, as mentioned in our last post, the SEC’s Division of Exams (EXAMS) has made it a priority this year to focus
Word-of-mouth is still one of the best ways to attract business. Investors, whether new or seasoned, consistently look to the experiences of previous customers or talk to someone they trust before they hire a financial adviser. As a result, posting great reviews and compensating others to make recommendations continues to be a key part of
If there was ever a reason to follow Josh’s advice to involve compliance early in building out the functionality of your robo-adviser, the recordkeeping requirements of the Advisers Act are it. As Josh mentioned in his post, Advisers Act Rule 204-2 imposes extensive recordkeeping requirements that you’ll want to be familiar with from the
When it comes to trading in your firm’s own investment accounts (proprietary trading), it’s never cherry-picking season. Instead, when allocating investment opportunities, you should follow the golden rule – treat your clients like you want to be treated.
What does this mean? As an investment adviser, your fiduciary duty requires you to allocate securities and
So, let’s say your robo-adviser firm has created a brand new strategy that you think would be attractive to investors. You’ve registered your firm, licensed your personnel, built and tested the algorithm, and now you’re ready to bring your strategy to market. Now, all you need to do is find a broker who
To date, we have covered a myriad of topics designed to help you get your firm off the ground, focusing primarily on issues like registration, licensing, advertising, disclosure, and communicating and contracting with clients. These critical issues have one thing in common – they all involve working with folks outside your firm. Today, we kick
If you can believe it, May 1, 2020 is almost upon us. And if you don’t remember from our February post, that is the day when advisory firms serving retail investors may start filing client relationship summaries on Form CRS. As a reminder, Form CRS gives clients a quick summary of the key things