Welcome to the January 23, 2025 edition of On The Docket, which includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket page of the Beach Street Legal website. 📥 If this […]

The short version Reporting companies are not required to file beneficial ownership information (“BOI”) with FinCEN during the pendency of ongoing litigation in federal court.  The long version Time will tell whether the BOI filing obligation will resurface down the line after working its way through the courts, but for now the ‘on again, […]

Welcome to the December 12, 2024 edition of On The Docket, which includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket page of the Beach Street Legal website. 📥 If this […]

A U.S. District Court for the Eastern District of Texas has issued a preliminary injunction that prevents the Financial Crimes Enforcement Network (“FinCEN”) from enforcing its Beneficial Ownership Information (“BOI”) reporting requirements. For reporting companies in existence before January 1, 2024, a BOI report filing would have been due by January […]

An investment adviser is a fiduciary. As a fiduciary, an investment adviser owes a duty of care and loyalty to its clients. The duty of care obligates an investment adviser to seek best execution of client securities transactions. Easy, right? If only. Neither the Investment Advisers Act of 1940 nor any of the […]

As you may be aware, certain states have adopted an annual Investment Adviser Representative (“IAR”) Continuing Education (“CE”) requirement. The states that have adopted an IAR CE requirement can be reviewed here, but have also been copied below for ease of reference. Such IAR CE requirements apply equally to both […]

Welcome to the September 6, 2024 edition of On The Docket, which includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket page of the Beach Street Legal website. 📥 If this […]

In academia, the specific content of an upcoming exam is kept under lock and key by the proctoring teacher until it is presented to students on the day of the exam. Students are expected to have studied the subject matter and class material with such thoroughness that – without knowing […]

Welcome to the May 10, 2024 edition of On The Docket, which includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket page of the Beach Street Legal website. 📥 If this […]

When the SEC first laid the path for registration as an “Internet investment adviser” in late 2002, the business model of rendering investment advice exclusively through an interactive website was still very much in its infancy. Wealthfront and Betterment, 2 of the earliest robo-advisers on the scene, didn’t register with […]

Welcome to the March 1, 2024 edition of On The Docket, which includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket page of the Beach Street Legal website. 📥 If this […]

Welcome to the fifth edition of On The Docket. This edition is dedicated to just a single topic: the Beneficial Ownership Information Reporting Rule. What follows is a very brief overview of the Beneficial Ownership Information Reporting Rule and its specific applicability to registered investment advisers, along with hyperlinks to […]

Welcome to the fourth edition of On The Docket, which is the recently-ascribed name to the Beach Street Legal blog. This edition includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket […]

When the SEC or its staff publishes anything related to rules, regulations, or interpretations, one of the most common prefatory pontifications is that the application of such rules, regulations, or guidance “depends on the facts and circumstances.” Read: We’re not going to paint ourselves into a corner and give specifically […]

5 Important Legal/Compliance Steps Of Buying, Selling, And Merging A Financial Advisory Firm A private company and its founder(s) are almost certain to experience at least one of the following 3 occurrences over the course of the company’s lifecycle: From a purely economic perspective, the 3 nearly inevitable occurrences listed […]

It is well understood that investment advisers are fiduciaries that owe a duty of care and a duty of loyalty to their investor clients. What is less well understood is what this actually means to advisers from a practical implementation perspective. In other words, how exactly should an adviser conduct […]

Welcome to the third edition of On The Docket, which is the recently-ascribed name to the Beach Street Legal blog. This edition includes the following content: 🌐 All past On The Docket editions (as well as other article, video, and podcast content) are available by visiting the On The Docket […]

2004 was a monumental year in the world of investment adviser compliance. It was the year that – for the first time – investment advisers registered with the SEC were required to 1) adopt and implement written compliance policies and procedures, 2) review such policies and procedures annually, and 3) […]

Welcome to the second edition of On The Docket, which is the recently-ascribed name to the Beach Street Legal blog. This edition is again longer than anticipated, but the SEC has been keeping the industry busy with new rule proposals and adoptions in recent weeks as you’ll see below.  🌐 […]

Welcome to the first edition of On The Docket, which is the recently-ascribed name to the Beach Street Legal blog. This inaugural edition is a lot longer than it will typically be in the future, as there was a fair amount of backlogged content and information that has accrued over […]

All investment advisers are fiduciaries that owe a duty of care and loyalty to their clients. In an ideal world, that would be the end of the story and the need for investment advisers to maintain a prescriptive code of ethics would be unnecessary. Unfortunately, the early 2000s were plagued […]

If the Form ADV is the most important regulatory filing for a registered investment adviser firm, the Form U4, also known as the Uniform Application for Securities Industry Registration or Transfer, is the most important regulatory filing for its individual investment adviser representatives. Form U4 is a unified form filed electronically through the FINRA […]

A dead Greek guy named Heraclitus is most often attributed as the source of the following platitude: “the only constant in life is change.” Though he predated the state/Federal divide of investment adviser regulation by about 2,500 years, his observation is apropos to advisers that are on the bubble of […]

Form ADV is perhaps the most important document a registered investment adviser will prepare in the entirety of its life cycle – at least from a regulatory perspective. This is not only because it is filed with the SEC and/or state securities regulatory authorities, but also because it is publicly available and […]

November 4, 2022, marked the mandatory compliance deadline with respect to the SEC’s overhauled Marketing Rule. It also marked the day that the SEC’s former Cash Solicitation Rule was put out to pasture after 43 years. It was a good run. The former Cash Solicitation Rule may be gone, but it is not […]

While the SEC’s recently overhauled Marketing Rule has received significant attention primarily for its newfound permissibility with respect to investment adviser testimonials and endorsements, there’s another equally significant component of the Marketing Rule worth discussing: performance advertising. This component of the Marketing Rule synthesizes myriad SEC no-action letters and guidance over the past several […]

Part 1: When, Why, & How to Register or Notice File In the United States, the regulation of investment advisers is intentionally divided between both Federal and state governments. This duality continues the through-line of Federalism borne out of the Constitution, but creates potentially very different experiences for advisers registered […]

Part 1: Statutory Requirements As unbelievable as it may be, the Investment Advisers Act of 1940 and the rules thereunder don’t require client advisory agreements to be in writing. Seriously. Technically speaking, an oral understanding that is never memorialized to a written instrument may be deemed a valid means by which a […]

Pursuant to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), those that provide fiduciary investment advice to plan sponsors, plan participants, and IRA owners may not receive payments creating conflicts of interest unless they comply with protective conditions in a “prohibited transaction exemption” (or “PTE”). What constitutes […]

There have been a few interesting regulatory developments from our friends at the SEC recently, and we thought it best to summarize the more notable of such developments below: “Hedge Clauses” in Advisory Agreements A “hedge clause” is a contractual provision that purports to limit one party’s potential liability to […]

With any luck (and lots of hard work), the founder of a financial advisory firm will inevitably be confronted with the following realization: I need to hire someone. As a firm grows and matures, and the founder spends comparatively more and more high-value time actually rendering advice and managing client […]

Author’s Note: The SEC’s Final Rule (86 FR 13024) was published in the Federal Register on March 5th, 2021. The effective date for the rule will be May 4. RIAs have 18 months to become compliant with the new rule, with a firm compliance deadline of Nov. 4, 2022. In the automotive […]

July 10, 2020 Author’s Note: Two days after this article was published, the SEC proposed to update Form 13F and – most significantly – increase the reporting threshold from $100 million to $3.5 billion. As much as I would like to take credit for the SEC’s swift reaction to my […]

The integration of college funding services into an adviser’s practice is an excellent way to add another dimension to the comprehensive financial planning process. Given the significant financial impact that college funding decisions alone can have on a family’s overall financial plan, such integration can also have the added benefit […]

The rules governing investment advisers’ ability to pay for client referrals may be deceptively complicated, but at least such rules exist in the first place. When the SEC first proposed to regulate paid solicitors in Advisers Act Release No. 615 in 1978, it sought public comment on the advisability of […]

An investment adviser’s fiduciary duty to seek best execution of its clients’ securities transactions has recently stepped back into the spotlight. In July, the SEC issued a Risk Alert entitled “Compliance Issues Related to Best Execution by Investment Advisers,” and in April it released its much-anticipated proposed interpretive guidance regarding […]

Advisor. Broker. Wealth Manager. Financial Advisor. Investment Advisor. Financial Consultant. Financial Planner. Savings Coach. Budget Doctor. Wealth Architect. Money Ninja. Cash Llama. The regulatory approach to financial professional titles to-date has pretty much been “Pick one and have at it.” Hyperbole aside, I’m far from the first person to observe […]

A few months ago, I wrote an article about the regulatory considerations that an RIA should keep in mind when hiring a new individual advisor into its business. Because that article was specific to new investment adviser representatives (“IARs”), it focused on disclosure, licensing, registration, documentation and insurance matters. But […]

The SEC’s custody rule has proved to be a real pain in the ass. But then again, so too did Bernie Madoff (and that is perhaps the most generous of monikers). Lest we forget, the SEC’s laser focus on the custody rule as we know it today is borne in […]

If you own an investment advisory business, growth is a good problem to have. It can become such a big problem, however, that you may consider hiring another you… another financial advisor to help serve your existing clients and prospect for new ones. There are many legal and compliance considerations […]

“Supervision” is one of those compliance buzzwords that gets tossed around without much explanation, like its meaning is taken for granted and assumed to be obvious. I submit to you that it is not, especially when it comes to demonstrating that adequate supervision of a person, process, product, or policy […]

A little less than a year ago, I wrote an article about alternatives to mandatory arbitration for resolving disputes between advisors and their clients (see, Beyond Mandatory Arb: 4 Options for Advisor-Client Dispute Resolution). Consider this article the prequel. Indeed, there is an even more attractive means to resolve a […]

There’s a State Farm commercial currently on TV that depicts Green Bay Packers quarterback Aaron Rodgers attempting to kill a fly in his house using a golf club. He swings wildly at the fly, loses his grip on the club, and sends it crashing through his bay window and into […]

In some form or another, nearly every registered investment adviser will at some point be involved in a merger, acquisition, sale, or restructuring. Whether it’s a simple equity ownership stake by a new financier, the addition of a new partner, a union of two practices, the death of a major […]

Federalism can be a real pain in the neck sometimes. While the duality of both state and federal government has endured and served our country well, it has made investment adviser registration at the state level a mix of hard-to-find statutes, non-intuitive exceptions and revenue grabs. The most notable of […]

Last month I penned an article that described how the SEC expects advisors to calculate their Regulatory Assets Under Management (“RAUM”) with respect to investment management and financial planning clients. Only securities portfolios for which the advisor provides “continuous and regular supervisory or management services” count toward RAUM, but advisors […]

As the financial services industry continues to evolve, so, too, does the distinction between “investment management” and “financial planning” as discreet but complementary services that a registered investment adviser can provide to clients. I’d read two of Michael Kitces’ recent posts for a more fulsome discussion of an “investment-centric” versus […]

It’s been said that the eyes are the window to a person’s soul, but I’d argue that a person’s internet browsing history is also pretty telling. It can reveal a lot, and in my case it revealed that I am a complete and incorrigible fanboy of the laws, rules and […]

On February 21, 1878, the first telephone book was issued in New Haven, Connecticut. On the same date in 1925, the New Yorker published its first issue. And on the same date in 2013, the SEC published its examination priorities for the year.1 Some have called it the literary trifecta […]

When it comes to custody, most registered investment advisers avoid it like you avoid the obnoxious coworker at the company party. Both require careful maneuvering to evade, are easy to confront if you’re not paying attention, and can be extremely challenging to understand when engaged. Suffice it to say, accidental […]