Notes

"Will our regulatory agencies finally regulate IRA Registration Services? Some are sounding the alarm bells, and others are sounding the warning bells for more regulation. "You bet they will," says Greg Miller, Executive Vice-President of The Financial Planning Association (FPA). "The main topic of this AMEX Letter is whether brokerage houses should be required to register with the Commission (SEC) as 'over-the-counter securities dealers.' That seems like a major issue that needs to get resolved in the next year or two."
According to Miller, the AMEX is concerned about the lack of registration and educational services for brokerage houses across the United States. "We need to have an educational resource for our industry," said Miller. "It's apparent that the SEC is not doing anything to help alleviate the registration needs for these companies." He went on to say that some of these companies may never be regulated by the SEC, and they certainly could go under if nothing is done to change the incentives that prop up these unregulated companies. This opens the door wide open for anyone wanting to be involved in advisory business working with a registered investment adviser (RIA's).

"For years, I have talked to institutional clients who don't understand that an RIA isn't a stockbroker. They think of the RIA as being like an investment counselor. But that's really not the case. An investment advisor can do the same things as a broker-dealer. When you have an RIA registered with the SEC, it gives you access to everything that a registered investment adviser can do."

The AMEX has also been very concerned with conflicts of interest involving investment advisors and brokerage firms. " RIA compliance consultant, RIA registration services, RIA registration training, investment adviser compliance services realizes that these conflicts exist and has taken actions to address those concerns," said Miller. This has caused many brokerage firms to offer training and educational opportunities to help their own and independent investment advisors comply with their own strict compliance guidelines. This has been very good for consumers, because now they don't need an RIA Registration Services provider to provide these services.

This doesn't mean that an individual doesn't have to be careful when hiring a RIA Compliance professional or finding an independent consultant to work with. Just because you need a RIA Registration Services provider doesn't mean that your consultant needs to be certified by the SEC or have a certain amount of experience in compliance services. If a company requires certain types of services then you should look for a Compliance professional that has experience in those areas. Don't assume that every RIA Compliance firm will be able to provide the complete range of services that you need. In fact, some firms specialize in one or two areas of compliance.

Overall, registering with an RIA Registration Services provider is a great way to go about the business model of self-certification, voluntary compliance and audit notification. While it's always wise to conduct an interview with an advisor before you hire them, you can still be comfortable. A good compliance manual and compliance service are still necessary for a smooth registration process and a good business model.
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