Notes

Employment Matter Services
The Investment Advisers Act is a fairly straightforward piece of legislation that governs the professional and investment adviser employment practice in the United States. It was designed to protect investment advisers from retribution, or from being defrauded, by requiring them to make full disclosure of material and non-material information to clients before engaging in any advising activity. It also requires investment advisers to use proper ethical strategies to ensure compliance with its provisions. In short, it's there to protect you.

However, this law is also very broad in what it covers and can potentially be applied in a wide number of circumstances. For example, an investment adviser may have advised a client against providing material or non-material advice as a result of potential regulatory violations. However, this advice would not be illegal if the client had not informed the adviser of the potential illegality of their conduct. The regulatory compliance consultant, however, would have no authority to penalize the client for advising him/her against doing anything illegal, and the advice would still be legally binding on the client even if the client had not requested it.

There are a number of grey areas surrounding the regulation of investment advisers. An important grey area revolves around the idea of regulatory compliance consulting. The mere act of advising clients - even on matters that the adviser considers ethically repugnant - is considered an improper act under the Advisers Act. The Act makes no mention of whether such advising should actually take place. This grey area is made even more complicated by the fact that the Act itself requires that the advisor engaged in regulatory compliance conduct, and that he do so in good faith. This further adds to the burden of regulatory compliance consultancy because it requires the investment adviser to demonstrate that his/her conduct will not result in harm to the interests of any client who might receive such advice.

One possible solution to the regulatory compliance issue revolves around the idea of allowing the investment adviser to consult the client before engaging in any regulatory advisory activity. Under this proposal, the investment adviser would be required to prepare a report describing the client's objectives as well as discussing with the client the regulatory compliance risks likely to arise as a result of such activities. This report could then be submitted to the client for his/her approval. The important drawback with this approach, however, is that it might not be sufficient to satisfy the FSA requirements. In order for the submission to satisfy the Reg FSA standards, the investment adviser would need to undertake regulated professional services, which might make him/her ineligible to engage in regulated professional services.

Another approach that has been taken in relation to investment adviser employment issues is to regulate the advice provided by the investment adviser according to the model code of conduct set out by the Financial Services Authority (FSA). The FSA recently published a draft code of practice for financial advisors that would force firms to at least have a minimum number of seats in its accredited financial advisor Register of Investment Advisers (IRAs). The regulator hoped that this would encourage firms to recruit and retain the services of experienced professionals in the investment adviser arena. Regulated advisors would also have to register with the FSA before being able to provide regulated professional advice to clients.

In RIA compliance consultant, investment lawyer, investment adviser compliance services, investment adviser regulation services, financial advisor services of all the potential risks involved in investment adviser employment, it's surprising that very few people ever have to face up to the potential regulatory issues that could arise as a result of such employment. However, if you are planning to work as an investment adviser, it is important to be aware of the potential risks and to prepare yourself for them. The best way to prepare for regulatory scrutiny is to consult with an FSA regulated professional services provider. Such a provider can offer the experience of industry knowledge and professional contacts that would enable you to better understand the regulatory considerations involved in such employment.
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