SEC Reviewing Retirement Advisers for Misconduct

The SEC on Monday issued a Risk Alert to advisers and brokers offering investment advice regarding retirement planning and to investors in retirement. The publication is the start of a multiyear investigation by the Office of Compliance Inspections and Examination called Retirement-Targeted Industry Reviews and Examinations (ReTIRE).

The review will focus on practices aimed at investors saving for retirement. It will ensure that brokers and advisers have a reasonable basis for their recommendations, avoid inherent conflicts of interest, and that companies have adopted effective compliance programs and oversight of their staff. The SEC review will also look at whether marketing materials are accurate without omitting material information and whether disclosures, including the fees charged, are complete and accurate.

The Risk Alert is not aimed at educating investors but at brokers and advisers. It educates them as to potential problem areas in their business and encourages them to review their system processes, such as supervisory, compliance and risk management, in order to make changes to ensure compliance with the expectations of the securities regulator.

This advisory is not surprising given the attention this area has received within the United States Government this year. At the beginning of the year, President Obama called for the Department of Labor to impose a fiduciary standard on retirement advisers within the scope of its regulations (ERISA plans). The SEC has also been taking action to consider standardizing the fiduciary requirements for its brokers.

If you are aware of wrongdoing by a financial planner, contact one of our SEC whistleblower attorneys to discuss whether you may be eligible for a whistleblower reward. An attorney can be reached by either our contact form or by phone call to 1-800-590-4116.

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