Anniversary Letter

On the heels of robust economic growth and one of the longest bull markets our country has ever experienced, I’m sure many would have preferred to stick with the usual Cut, Color, Clarity, and Carat.  However, this past year, we got a few more C’s than we were looking for:  CARES, COVID-19, Continuity, Cybersecurity, CFP Code of Conduct, and Compliance, to name a few.

The last 12 months have brought a renewed concern for the welfare of retail investors.  This concern was a significant part of the SEC’s regulatory focus and priorities.  In addition to focusing on protecting Vulnerable Investors, a great deal of guidance focused on Cybersecurity practices designed to ensure that privacy and confidentiality was being effectively upheld.

Additionally, with the passage of Regulation Best Interest (“Reg-BI”) in 2019, the SEC decided to preserve investor choice and focus on improving the information put into the hands of retail investors, especially for investors using brokers.  ADV Part 3, also known as Form CRS, was ostensibly created to establish a more uniform way for retail investors to compare advisory services and brokerage services.  We’ll see what the upcoming months hold for firms as the SEC and FINRA conduct preparedness exams following Reg-BI’s 6/30/2020 enforcement date.

Various state regulators, supported by industry groups, voiced their opinions that Reg BI did not go far enough (as the DOL Fiduciary Rule did) and have pursued legal action to block Reg BI as well as working to establish their own “Fiduciary Rule” standards.  The NAIC has also put forth it’s model regulations for the insurance industry to consider around annuity sales regulation.  Early June saw the Department of Labor send to the Office of Management and Budget for review an updated “Fiduciary Rule” which appears to align more with Reg BI than its predecessor. 

The CFP Board Code of Ethics and Standards of Conduct became effective in October 2019, but enforcement was delayed until 6/30/2020 to align with Reg-BI’s enforcement date.  This additional time has given CFP® professionals time to digest the new requirements and prepare.

Fortunately, this delayed enforcement provided additional time for many to prepare; time needed especially with the onset of the COVID-19 pandemic which impacted many all around the world and continues to affect life here at home.  Many have adjusted their lifestyles and business operations (by choice and by governmental mandate).  World leaders have had to learn on the fly and adapt their policies to combat the social and economic effects of the pandemic.  The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and other stimulus packages were passed.  With stimulus checks for individual taxpayers, PPP loans to small businesses, Fed monetary policy actions, and potential infrastructure stimulus, much is being done to soften the fallout from the economic shutdown caused by stay at home orders intended to reduce the spread of the virus.

To make matters worse, the unscrupulous portion of society looking to capitalize on the confusion and fear around the pandemic issue has created additional Cybersecurity concerns for individuals and business alike.  In addition to Phishing and Business Email Compromise (“BEC”), the expanded remote working environment has presented an opportunity for fraudsters to impersonate firms and associated persons in communicating with customers.

The Compliance Challenges we face have been accompanied by the recent health and societal concerns taking place right now.  All of these events are forcing further difficult discussions, actions, and changes at many levels to adapt and evolve with the times.  As a nation that has experienced conflict and turmoil throughout its history, we are optimistic that we will ultimately continue to rise and grow as a unified Country with a stronger sense of Community, Compassion, and Consideration.

Stay healthy and safe and have a most enjoyable 4th of July!

If you are the Owner, CEO, President, Chief Compliance Officer – even the person in charge of marketing – you have a burden to comply with the securities laws. Our team of Professional Weightlifters has an array of compliance services and resources to lift that burden off your shoulders.

If you need a compliance partner providing boots on the ground support, our on-going consulting services may be the solution for you.

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If you are a do-it-yourself type person, we offer a number of compliance resources and programs:

RIA Fast Track Program

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Includes compliance resources and consultations to get your operations in tip-top shape.  Designed to lift the burden of compliance off your shoulders in an efficient and economic manner, it is a part do-it-yourself and part “Ask the Expert.”  If you need to dust off your compliance files, contact us for details.

Compliance Resources

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If you need a compliance partner providing boots on the ground support, our on-going consulting services may be the solution for you.

  • Our Professional Weightlifters are available to help you stay on top of the compliance environment and help you remember all those compliance do’s and don’ts.
  • Need more time in your day? We assist you with the implementation of your compliance responsibilities.
  • Contact The Consortium to see how we can be of assistance to you: or (971) 801-1346.

— Todd Sakoda
— John T. Carr
— Lisanne M. Butterfield

The Consortium has been lifting the burden of compliance for advisors since July 4, 1989.