In the recently published Risk Alert, the SEC summarizes their observations of RIA disclosures, policies and applications on economic conflicts of interest, and fee arrangements. These observations are not particularly new. As a fiduciary, an advisor has an obligation to either avoid or mitigate conflicts of interest through full and fair disclosures. However, what continues to remain challenging for many RIAs is building a process to properly identify conflicts of interest, discerning when they should be disclosed, and maintaining proper controls to ensure fee billing practices remain aligned with the advisory agreements, disclosures, and a firm’s actual operations. 

Rather than summarize what this most recent Risk Alert identified, we wanted to provide some practical takeaways to help you continue building out your firm’s compliance systems specifically for conflicts and fee billing arrangements.