The SEC’s Office of Compliance Inspections and Examinations (OCIE) is launching a sweep examination that will target the retirement-based savings activities of broker-dealers and investment advisers.
The multi-year Retirement-Targeted Industry Reviews and Examinations (ReTIRE) Initiative, to be run by OCIE’s National Examination Program, will focus on higher risk areas of sales, investment and oversight processes, with an emphasis on potential harm to retail investors.
Specifically, the ReTIRE examination initiative will focus on, among other things:
- Whether broker-dealers and advisers have a reasonable basis for investment recommendations for retirement-related advice and products;
- How advisers and broker-dealers manage and disclose conflicts of interest to their clients;
- Adequacy of supervision of compliance controls, especially across multiple offices and among representatives with outside business activities; and
- Adequacy of brochures, sales materials and disclosures to retail investors.
One of OCIE’s stated goals is to encourage advisers and broker-dealers to “reflect upon their own practices, policies and procedures” and to promote improvements in supervision, oversight and compliance programs. In anticipation of OCIE’s sweep program, broker-dealers and advisers should review their compliance policies and procedures relating to retirement products to ensure that they pass muster.