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FINRA Arbitration cases soar

New arbitrations filed with Finra increased 43% from 2008 to 2009.  Breach of fiduciary duty represented  59% of all complaints. 

Guidance on Blogs and Social Networking Websites - FINRA

Americans are increasingly using social media Web sites, such as blogs and social networking sites, for business and personal communications. Firms have asked FINRA staff how the FINRA rules governing communications with the public apply to social media sites that are sponsored by a firm or its registered representatives. This Notice provides guidance to firms regarding these issues.

Steps Investment Professionals can take to avoid claims

Review and update investment plans strategies and risk tolerance guidelines with the client(s). Make sure to listen, document and communicate your efforts on their behalf. 

Eight Advantages of a Wealth Advisor Policy

It is common practice for Registered Representatives to maintain professional liability insurance through their Broker/Dealer.  However, as many advisors evolve their practice to RIA's their Broker/Dealer coverage may no longer continue to be sufficient.

How Many Brokers Went Independent in 2009?

According to Discovery Database, which tracks movements among financial advisory firms, in 2009 more than 2,800 registered representatives “broke away” from a broker/dealer firm and moved to a registered investment advisory (RIA) firm.

Frequently Asked Questions

- What is the best way to determine if my current policy provides adequate coverage?

- Do I need “Fiduciary Insurance”?

- How do I obtain an ERISA bond for one of my clients 401K plans?

CFDD Post-conference report 

Gary Sutherland, CEO of NAPLIA recently presented at the CFDD Conference along with attorney, Marcia Wagner and Brian Hubbell from Hubbell Consulting, LLC. 
Session highlights focused on understanding who is a fiduciary, "If you render advice on a continuous basis and that advice is particularized to that plan and people rely on that advice,...then you are a fiduciary" according to attorney Wagner.
Sutherland outlined several steps that advisers can take to protect themselves against fiduciary liability.  Read the post-conference report

Internal Revenue Service releases memo impacting fee-based accounts

In a recent memo released by the IRS, the service stated that fees charged in fee-based investment accounts should not be capitalized into the cost of the securities.  Previously, some investors would add the fees to to the cost of the account ultimately reducing the impact of capital gains and taxes.  This new memo clarifies that such fees should be considered expenses and not to the benefit of taxes.

U.S. Labor Department proposes regulations to increase disclosure of fees and conflict of interests affecting 401(k) and other employee benefit plans

The U.S. Department of Labor announced a proposed rule that will enhance disclosure to fiduciaries of 401(k) and other employee benefit plans to assist them in determining the reasonableness of compensation paid to plan service providers and conflicts of interest that may affect a service provider’s performance under a service contract or arrangement.