SEC Marketing Rule Continues To Be Top Compliance Concern, Survey Shows
June 30, 2022
IAA VP of Communications & Marketing Janay Rickwalder.
Most firms report strong compliance programs and effective business continuity plans
Washington, DC (June 29, 2022) – For the second year in a row, implementing the SEC’s Marketing Rule for Investment Advisers remains the number one worry for investment adviser compliance officers, according to the 2022 Investment Management Compliance Testing Survey.
Advertising/Marketing was identified by 78 percent of survey respondents as the “hottest” compliance topic – up 20 percentage points from last year. Cybersecurity followed with 67 percent and climate change/ESG climbed to third in compliance officers’ list of hot topics, named by 50 percent of respondents. Other key topics noted align with the SEC exam, enforcement, and rulemaking priorities, to include:
- Conflicts of Interest
- Fee Calculation and Billing/Expenses
- Private Funds Regulation
- Digital Assets
- Insider Trading
- Electronic Communications Surveillance
Now in its 17th year, the Investment Management Compliance Testing Survey is a joint project of the Investment Adviser Association, ACA Group, and Yuter Compliance Consulting. It is the most comprehensive resource available for identifying the top concerns of investment management compliance professionals and the types of compliance testing practices and strategies investment adviser firms are using to address core compliance topics.
Once again, no survey respondents reported material compliance violations related to BCP/the pandemic this year – evidence of strong compliance programs and effective business continuity plans. With respect to the breakdown of employees teleworking, the findings suggest that the industry is more remote than expected, with only 13 percent of respondents having fully returned to the office. Many firms had some or all personnel working from home (73 percent).
About the Survey Respondents
Compliance professionals at 425 investment adviser firms participated in the survey. All firm sizes were represented – with 21 percent of respondents managing less than $1 billion in assets, 41 percent managing $1 billion to $10 billion, and 37 percent managing more than $10 billion. Close to half (42 percent) of responding firms reported having between 11 and 50 employees, which is consistent with industry data showing that most investment advisers are small- to mid-sized businesses.
Services provided by responding firms spanned the full range of client types, including retail individuals with a typical account size of $1 million or less (35 percent of respondents), private funds (60 percent), ERISA assets/pension consultants (45 percent), institutional clients (58 percent), and high net worth individuals (56 percent).
Full results of the 2022 Investment Management Compliance Testing Survey are available online.
About the Investment Adviser Association
The Investment Adviser Association (IAA) is the leading trade association representing the interests of fiduciary investment adviser firms. The IAA’s member firms collectively manage more than $35 trillion in assets for a wide variety of institutional and individual investors. In addition to serving as the voice of the advisory profession on Capitol Hill and before the SEC, DOL, CFTC and other U.S. and international regulators, the IAA provides extensive practical and educational services to its membership. For more information, visit investmentadviser.org or follow us on LinkedIn, Twitter and YouTube.
About ACA Group
ACA Group (“ACA”) is a leading governance, risk, and compliance (GRC) advisor in financial services. We empower clients to reimagine GRC and protect and grow their business. Our innovative approach integrates advisory, managed services, and distribution solutions with our ComplianceAlpha® regulatory technology platform with the specialized expertise of former regulators and practitioners and a deep understanding of the global regulatory landscape.
About Yuter Compliance Consulting
Yuter Compliance Consulting provides advising and coaching services trusted by the industry’s chief compliance officers. Amy Yuter, Managing Principal of Yuter Compliance Consulting, is the founder of the Investment Management Compliance Testing Survey. Amy has 30 years of industry, consultation and SEC regulatory experience in overseeing investment advisers, investment companies, public companies, broker-dealers, and private funds. Amy also founded the Philadelphia Compliance Roundtable and served as a Director of the National Society of Compliance Professionals. Yuter Compliance Consulting partners with clients to provide personalized consultation and support to enhance compliance resources and improve compliance programs. For more information, visit https://yutercompliance.com.