Last week, Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, urged advisory firms attending the 11th Annual IA Compliance Best Practices Summit to "step up" and strengthen their "culture of compliance."
Although focused on advisory firms, Ms. Richards' remarks were the latest in a series of recent public statements by SEC Commissioners and senior staff members stressing the importance of compliance and, in some cases, exhorting the financial services industry to review and strengthen their compliance practices in light of current as well as anticipated risks.
In her speech, Ms. Richards expressed the view that a "thorough and careful review of new compliance risks due to changes in the firm's business, its structure, its products, its service providers or other changes is critical - to assure that the compliance program is 'square on' today's compliance risks." Ms. Richards also highlighted four critical areas for compliance officers to consider in helping to ensure that their firms meet applicable fiduciary standards owed to advisory clients and to prevent "problems, misdeeds and misconduct" from occurring. These areas include:
3) performance claims; and
4) the resources supporting the firm's compliance program.
Ms. Richards suggested that advisory firms take a fresh look at specific practices and controls and outlined steps that firms might take to help ensure compliance. A copy of Ms. Richards' speech can be viewed by clicking here.