EASTERN REGIONAL
DISCUSSIONS
TOPICS
Tuesday, October 27, 2015
8:00 a.m. to 4:00 p.m.
INVEST Financial Corporation Office
Tampa, FL
DRAFT AS OF 9.25.15 – SUBJECT TO CHANGE
1. Welcome & Introductions
a. Introductions
b. Housekeeping
c. Anti- Trust Statement
2. DOL Update
a. Current status of the proposal
b. FSI’s supplementary comment letter
c. FSI’s financial advisor and grassroots initiative
d. Impacts of the proposal on firms
3. Advocacy Update
a. Federal Legislative Update
b. Federal Regulatory Update
c. State Legislative Update
d. State Regulatory Update
e. Other Issues
4. Recent Regulatory Experiences
a. SEC, FINRA or State Exam Experiences so far in 2015
i. FINRA
1. Formal Actions During Exams
2. Response Timeframes for On-Site Requests
ii. State
1. Exam of Firm
2. Exam of Independent RIA’s
iii. SEC
b. Any issues with Cause exams
c. Any issues with Cycle exams
d. Miscellaneous Inquiries
5. 2015 Compliance Issues
a. Biggest compliance issues facing your firms
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c. Potential emerging compliance issues in 2015
6. Sweep Letters or Other Regulator Document Requests
a. Sweep Letter Trends
i. UITs
ii. Mutual Fund Sales Charge Waivers
iii. Conflict of Interest Review
iv. SEC Inquiry on Alternative Investments
v. Document Requests and other inquiries
7. BrokerCheck
a. Current background check status
i. Are you seeing you requests moving toward criminal disclosures
b. Have you seen an uptick in inquiries from FINRA about background checks on RR’s in
particular states?
8. IRA Rollovers
a. Recent FINRA Guidance
b. SEC & FINRA Exam Focus
c. ERISA Issues
d. Rule 72(t)
9. New Technology Platforms/Solutions
a. What new technologies have firms recently implemented or have plans to implement?
b. What’s been successful?
c. What would you do differently?
10.Mobile Applications
a. Does your firm have a customer app? Rep/Sales Force app?
b. What lessons have you learned from developing and rolling it out?
c. What are firms doing with smart phones and iPads as related to security and encryption?
11.E-Signatures
a. Any developments at your firm with regard to E-Signatures?
b. What products are you allowing it for?
12.SEC Lost Security holder & Unresponsive Payee Rule
a. Compliance/Technology/Operations perspective
b. Unclaimed Property and Returned Mail
i. How does your firm handle inactive accounts?
ii. How does your firm handle house accounts?
iii. How does your firm handle uncashed checks?
iv. How does your firm handle returned mail?
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a. Non traded REITs/Alternative Investments
b. Compliance Concerns
c. How are firms addressing the new regulations regarding pricing of complex products?
d. How are firms handling complex products
i. Due Diligence
ii. Training
iii. Sales Supervision
e. Required Licenses for RR’s
f. Customer Statement Rule
i. How are firms preparing for implementation?
14. Annuity C&L Shares
a. How are firms handling purchases of these share classes?
15.Supervision
a. Functions: correspondence review, transaction review, surveillance, etc.
b. FINRA Rule changes to Supervision Rule
c. Audit requests during recent FINRA exams
d. Remote Supervision
i. What is “regular and routine?”
1. Regulatory comments on your supervision model
ii. Specific compliance concerns
iii. How are firms handling remote supervision?
iv. Do firms have fraud concerns with remote offices?
e. Definition of “Internal Communications”
i. How are firms defining this?
ii. Any feedback from FINRA?
f. Technology and Operations perspective
16.Suitability
a. Compliance Concerns
b. Alternative Investments
c. Aging Population
17. Advisor Transition
a. How do firms properly transition advisors in/out?
b. Training
c. Reg. S-P compliance
d. Account transfer issues
e. Termination decisions
f. Abandoned accounts
g. “Firing” clients
18.Recruitment
a. Recruiting practices – Who is allowed to join your firm? Who isn’t?
b. FINRA Proposed Recruitment Compensation Rule
c. On-Boarding Processes
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e. Heightened Supervision
f. Potential Issues Involving Aging Advisors
g. Training for Newer Representatives
19.Succession Planning
a. Succession Planning
i. Retired rep to receive commissions for no more than 5 years following retirement
ii. Programs iii. Incentives iv. Challenges b. Referral Arrangements c. Nuances d. FINRA Rule 2040(b
20.The next generation of financial advisors
a. Where are they coming from?
b. Who at your firm is focused on this issue?
c. What resources are you using to connect older FAs with possible successors?
21.Business Continuity
a. Does your firm have specific procedures?
b. Have you heard from FINRA on this issue?
c. Have you tested your plan?
d. How often are you testing?
e. Have you ever had to put your plan into action? If so, what lessons were learned?
22.Combating Fraud
a. What types of fraudulent requests are you seeing recently?
b. What new procedures have you put in place to combat this fraud?
c. How are you educating reps on this issue?
d. How are you balancing potential fraud with good customer service?
e. Are you using any technology solutions to assist combating fraud?
23.Senior Investor Issues/Elder Financial Abuse Reporting
a. FINRA Elder abuse prevention proposal
b. Mandatory Reporting
i. Penalties for failure to report
c. FINRA Hotline on Senior Investors
d. Specific compliance concerns
e. Regulatory Interagency guidance on Elder Abuse
f. FSI Resource Page
24.Branch Office Information Security and Privacy
a. Protecting client data security
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a. Regulatory experiences regarding consolidated statements
b. Does your firm allow them?
c. If so, what sort of review is required?
i. What are you auditing for?
ii. How are you evidencing your review?
d. If allowed, does your firm require/retain copies?
e. What Operations/Technology solutions have firms implemented to address regulatory
concerns?
26.Privacy Policy Mailings and ADV’s
a. Is your firm still mailing?
b. Can you force a client to opt in for paper rather than allowing them to opt out?
c. Any state restrictions?
27.Investment Advisory Issues
a. Low Volume Trading in Fee-Based Accounts
b. High Cash Balances in Fee-Based Accounts
c. FINRA oversight and ongoing suitability issues
d. State Exam Programs
28.Self Service
a. What self-service options do you provide your advisors or clients? i.e. systematic
withdrawals, checks requests, address changes, etc.
b. Do you encourage your clients to use these?
29.RoboAdvisors
a. How do you view RoboAdvisors?
b. Do you see it as a threat to the traditional advisors or potentially another, and cheaper,
product offering for advisors to use?
c. Are you incorporating this into your offering?
30.Cybersecurity
a. Update on FSI’s Cybersecurity Taskforce
b. How are firms addressing concerns related to cybersecurity?
c. Has your firm received any inquiries from FINRA or the SEC related to cybersecurity?
31.Cashier’s Checks
a. Does your firm allow cashier’s checks as funds for an account deposit?
b. Do you set any amount restrictions (e.g. only greater than 10k, no restrictions, etc.)
c. If you accept checks less than $10k, do you do a layering review for AML purposes?
32.Financial Literacy
a. Does your firm have any financial literacy initiatives?
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c. Are you working with your advisors to promote financial literacy?
i. Is there someone at your firm dedicated to promote financial literacy?
33.Social Media
a. Staying Compliant: Do’s and Don’t
b. Business v. Personal Social Media Accounts
c. Which Department at Your Firm Owns Social Media
