On the heels of a record year for advertising-related violations and fines in 2011—45 cases totaling $21.1 million— FINRA seems determined to protect consumers from misleading or inaccurate marketing communications. Significant new guidelines on broker/advisor advertising were announced in February to strengthen compliance and review procedures. FINRA will even be more vigilant against potentially misleading or exaggerated wording or graphics in marketing materials—from terms such as “cash cow” to images of a treasure chest or pot of gold.
New rules governing language, disclosures and the distribution of promotional materials will put advisors in the crosshairs. So firms will need to ramp up their compliance and supervision efforts and more closely track the use of their materials by employees to make certain that sales literature and advertising are used appropriately.
Check out this recent article from On Wall Street and let us know your thoughts. Are these measures necessary to protect investors or has the leash gotten too tight for advisors looking for new, creative ways to promote themselves?
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
Forbes has just named the 40 highest-earning hedge fund managers and traders of 2012.
This illustrious crew earned a combined $16.7 billion last year. The top earner took home $2.2 billion. Another four made over $1 billion each. (One is also the focus of a federal insider trading probe.) Other standouts were close behind. Care to guess who made the list?
If names like Tepper, Soros, and Cohen come to mind, you’re on the right track. But how did their funds do? Did they even beat the market? Get all the facts from Forbes, then post a comment to share your thoughts.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
The data has spoken: for advisors, social media’s potential value is enormous. Your clients are actively engaging in social channels, it’s time your business got in on the action. The benefits can be bountiful so long as you develop a well thought out plan and understand why it’s best to develop a written social media policy to protect your firm.
View the slideshare overview below to see the key reasons why the time has come to take action and benefit from today’s social ecosystem.
The uptake of mobile devices has been nothing short of astonishing but, until recently, the wealth management industry has lagged behind in adopting this disruptive technology. This comes as no surprise for an industry accustomed to strict regulation and privacy concerns.
As we noted in an earlier blog post, a number of advisory firms, broker-dealers and platform providers continue to roll out mobile solutions and apps to meet the growing demand for anytime, anywhere access to data. In particular, tablets are fueling the growth of mobile due to their dynamic graphics, intuitive navigation and superior platform for interactive conversations between advisors and clients.
Technological innovation has traditionally been a top-down phenomenon, but the rise of mobile technology has been driven by consumers from the bottom up and wealth managers and advisors have found themselves behind the curve, trying to understand how best to leverage this new technology. What are your thoughts on the value of tablets and mobile devices? Check out this article from onwallstreet and let us know.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
In welcome news for advisors, who strongly opposed FINRA’s efforts to become their primary regulator, it seems unlikely that there will be an overhaul in the current regulation of RIAs through the SEC. Having FINRA serve as a self-regulatory organization for advisors could lead—some say would lead—to a fundamental shift in the relationship between RIAs and their clients.
As we reported in an earlier blog post, FINRA spent much of the last couple of years lobbying to become the primary regulatory body for RIAs — spending nearly $5 million on the campaign since 2008. Though the issue is far from settled, it does appear to slipping down on the agenda as FINRA shifts its focus to other priorities. Meanwhile, the SEC continues to face challenges as the scope of its regulatory oversight continues to expand.
Considering what’s at stake, look for advisors to keep a close eye on the situation in the coming months. Even though FINRA has signaled a disinclination to pursue the matter, the battle may be over but the war continues to rage. Check out this article from onwallstreet and share your thoughts about FINRA’s cease fire on RIA oversight.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
If you’re like us, you probably have questions about the new GIPS Handbook. That’s why we’re excited about the Web Seminar that Ashland Partners held recently.
Ashland presented Top 10 challenges that investment performance professionals face with the latest GIPS updates, and if you think calculating accurate TWRs for composites made the list, you’re right. Here are just a few of the points Ashland covered:
- How to value portfolios in a composite when large cash flows occur
- How to handle composite membership when a large portfolio comes under management but the assets are invested incrementally over time
- The importance of keeping performance files updated
Other challenges highlighted were how to handle fees and how to close efficiency gaps at your firm. (Hint: Automate, automate, automate!) If you missed the seminar, don’t worry. Find out about all Top 10 challenges by listening to the recorded seminar, then post a comment to share your thoughts.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
Despite the recent turnover at the top of the SEC, the Commission continued forging ahead with enforcement actions targeting individual offenders. Fines levied against individuals—as opposed to firms—continued to grow in 2012. While settlements with defendants at companies increased by 6.6% with 714, settlements with individuals rose 14% to 537 settlements, the highest level since 2005.
This increased focus on individuals is especially notable with cases involving insider trading, which reached a record 118 cases in 2012. This included the $92.8 million fine against hedge fund titan Raj Rajaratnam, the largest ever assessed against a person in an SEC insider trading case.
This increase comes just as SEC Enforcement Director Robert Khuzami announced plans to depart the agency after nearly four years. Hired by former SEC Chairman Mary Schapiro, a key objective during his term was to focus more on individual accountability. One could argue that Ms. Schapiro did her part to shake things up. During her tenure from 2009 through 2012, the median settlement with individuals increased by nearly 40% from $110,000 to $152,667.
Some argue that fines against companies punish shareholders and there should be more attention paid to the sizable damage done by individuals. With key organizational changes still to come, is the trend towards increasing fines against individuals going to continue? What about companies? Does the SEC have a culture that is often too beholden to industry or will they continue to step up enforcement efforts?
Check out this recent article in Hedgeworld for the whole story, then post a comment to tell us what you think.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
Feeling overwhelmed by investment information overload and the compliance risks it entails?
Based on what we’ve observed, using technology to save time when searching for information is now critical to front office success. If you’re a portfolio manager, a CIO or a compliance specialist, you’ve probably realized you need a research management solution (RMS) to keep up with the avalanche of information. But do you have the tools you need to succeed?
We spoke with our Tamale RMS clients and put together this trend monitor to identify the top trends in research management in 2013. Check it out, then post a comment to let us know what you think.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
Eyebrows were raised recently when a prominent economist at the US Commodity Futures Trading Commission (CFTC) declared that high-speed trading firms were grabbing significant profits away from traditional investors. While the study has encountered some opposition, the findings also come as a council of the nation’s top financial regulators is showing concern that the accelerating automation and speed of the financial markets could represent a threat to investors and to the stability of the financial system.
The findings are startling: according to Andrei Kirilenko, a chief economist for the CFTC, high-frequency traders make an average profit of as much as $5.05 each time they go up against traditional traders buying and selling one of the most widely used financial contracts.
Meanwhile, high-frequency trading firms continued to struggle in 2012. Rosenblatt Securities estimated that HFT firms would earn no more than $1.25 billion in profits in 2012, down 35% from 2011 and 64% from a peak of $4.9 billion in 2009.
It seems it’s become challenging for high speed trading firms to thrive on lower volumes, while paying for ultra-fast data feeds, telecom lines and other required infrastructure.
Is high-speed trading really in danger of a slow fade-out and are we about see to less technology-induced trading disasters? Did we just witness a string of freakish occurrences the past few years? And could smaller traders leave the futures markets if profits erode, choosing to work in less transparent markets where high-speed traders will not get in the way. Check out this recent article from The New York Times and let us know what you think.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
What key trends do Advent clients and industry experts expect to see dominating the reconciliation and data management arena in 2013?
After the financial crisis of 2008, many firms adopted a “do more with less” approach. What they learned is that it wasn’t as big of a challenge as they thought it would be. Today many firms are leveraging technology—rather than staff—to grow their businesses, and other firms are benefiting from outsourcing certain functions. But that’s just the start.
Think you know the answer? Take a look at our latest trend monitor to see if you’re right, then post a comment to share your thoughts.
Ken Overholt manages Advent’s content and thought leadership programs. He’s been thinking and writing about financial services topics and investment management trends for over 20 years.
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