State registered investment advisors. NASAA released its 2019 annual report outlining their guidance from the state registered investment advisor firms it examined between January and June 2019. The complete NASAA report can be found here. Below is a summary of “Best Practices” included in the NASAA report, for state registered investment advisors.
Recommended Best Practices for Investment Advisers
Based on the 2019 sample data, NASAA recommends the following “Best Practices” as a guide to assist investment advisers in developing compliance practices and procedures.
• Review and revise Form ADV and disclosure brochure annually to reflect current and accurate information.
• Review and update all contracts.
• Prepare and maintain all required records, including financial records. Back-up electronic data and protect records. Document checks forwarded.
• Prepare and maintain client profiles or other client suitability information.
• Prepare a written compliance and supervisory procedures manual relevant to the type of business to include business continuity plan and information security policies/procedures.
• Prepare and distribute a privacy policy initially and annually.
• Keep accurate and current financials. File timely with the jurisdiction. Maintain surety bond if required.
• Calculate and document fees correctly in accordance with contracts and ADV.
• Review all advertisements, including website and performance advertising, for accuracy.
• Implement appropriate custody safeguards, especially for direct fee deduction.
• Review solicitor agreements, disclosure, and delivery procedures.
NASAA also provided in their report a link to their cybersecurity checklist that firms may find help. Click here for that link.
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