After examining over 100 advisors associated with wrap programs, the SEC found compliance concerns and identified areas where advisors needed to make improvements. The focus of the exams included advisors’ fiduciary duty to the wrap program/sponsors, disclosures to wrap-fee clients, and advisors’ compliance programs. This risk alert noted some examples of best practices, which we will review alongside SCS’s suggestions.

In November 2020 the North American Securities Administrators Association (“NASAA”) adopted a Model Rule, setting guideline requirements for investment advisor representatives (“IARs”) registered with investment advisory firms to complete continuing education requirements in order to maintain licenses in jurisdictions that adopt the rule. This will apply to both state and federally registered advisors.

Did you know the old Advertising Rule NEVER addressed performance advertising and for years advisers relied primarily on the Clover no-action letter, which was drafted in 1986? The addition of requirements around performance advertising in the updated Marketing Rule is a necessary addition, and the focus of this series.