FINRA Archives

FPPad Bits and Bytes for November 18, 2016

Posted on November 18, 2016 by Bill Winterberg in Bits & Bytes

On today’s broadcast, Wells Fargo announces a partnership with SigFig, Cetera’s computers systems suffer a two-day outage, lessons from a hack at Lincoln Financial, and more.

So get ready, FPPad Bits and Bytes begins now!

(WatchFPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by eMoney Advisor, the leading provider of digital wealth management solutions. eMoney just introduced two new Advanced Analytics products: Advisor Analytics Pro, offering advisors and support staff deeper business insights, and Office Analytics, offering never-before-seen firm-wide insights.

Featuring a customizable Analytics dashboard, an expansive library of new and interactive data charts, and more, eMoney’s Advanced Analytics solutions will help you put your data to work and uncover more opportunities. For more information the eMoney Analytics solutions, visit fppad.com/emoneyanalytics.

Here are the links to this week’s top stories:

Wells Fargo Goes Robo With SigFig Wealth Management from WSJ.com, and

Wells Fargo notice of an application for an exemption from certain requirements of rule 3a-7(a)(4)(i) under the Investment Company Act of 1940 from SEC.gov

[First up is news from Wells Fargo, as the bank, which finds itself in the middle of a very public firestorm over opening unauthorized accounts, announced this week that it is partnering with SigFig to release an automated investment service to customers of Wells Fargo Advisors sometime in the first half of 2017.

Other than the potential release date, there really wasn’t any concrete information on pricing or the types of investments to be used in the service. Will they be Wells Fargo mutual funds, or third-party ETFs? As of today, Wells Fargo doesn’t offer its own ETFs, but earlier this year, the company filed an exemptive relief request with the SEC, signaling some intent to enter the ETF space.

But that opens the door for potential problems with the Department of Labor fiduciary rule, highlighted by industry Nerd-In-Chief Michael Kitces, where automated investment services that recommend investments in proprietary products, Kitces calls out Schwab Intelligent Portfolios and BlackRock’s FutureAdvisor, do not qualify under the Level Fee Fiduciary exemption because of the variable compensation inherent in an allocation of proprietary ETFs!

So, this is all “industry” stuff, and not all that applicable to your business, but here’s my point. All the big banks, all the incumbent financial institutions are boarding the automated investment bandwagon. Sooner rather than later, your clients and prospects are going to get solicited by the very institutions they use today.

And clients are expecting an experience like Uber, but you’re still driving around a dirty taxi that has to be flagged down with a hand in the air that doesn’t have a functional credit card machine!] Wells Fargo & Co.’s brokerage arm is partnering with SigFig Wealth Management LLC to bring automated investment advice to clients, the latest example of how traditional wealth-management firms are working with startup robo advisers to offer new digital tools to investors.

Cetera Brokers Endure Two-Day Systemwide Crash from AdvisorHub

[Next up is news about Cetera Financial Group, as the independent broker dealer encountered a company-wide systems outage that affected 9,000 brokers as well as the company’s back-office and operations teams.

According to an AdvisorHub article, the outage started on Monday, and one broker with First Allied reported that he could not sign in to view emails, access performance reports, or even call Cetera using their standard phone number. Cell phone numbers were eventually sent out on Monday evening.

In a firm-wide conference call on Tuesday afternoon, Cetera Chief Executive Robert Moore apologized for the disruption and said systems had been fully restored, and added that no data had been compromised through hacking or any other unauthorized access.

So, let this be a reminder that if it’s been a while since you tested your business continuity plan, next week’s Thanksgiving break might be a good time to do so. It doesn’t matter if you manage your own systems or leverage the resources of a broker-dealer, you need to verify how you can perform the essential parts of your business in the event of a disruption.

Attackers are launching denial of service attacks every day against financial institutions, so it’s important that you know exactly what you need to do when the systems you depend aren’t available.] Just six months after emerging from bankruptcy, independent brokerage company Cetera Financial Group experienced a companywide systems outage Monday and Tuesday that walled off brokers at its seven operating broker-dealers from customer data, emails and other vital account management functions.

Lincoln Financial Unit Gets $650K Fine After Server Hack from Law360, and

LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. 2013035036601 at FINRA.org

[And speaking of attackers, my last story is about Lincoln Financial Securities, an affiliate of Lincoln Financial Group, as the company paid a $650,000 fine imposed by FINRA for failing to safeguard customer data stored on a cloud server used by one of its OSJs.

Sometime in 2012, hackers were able to access the could server configured by a third-party vendor and obtain records on approximately 5,400 customers. The FINRA Letter of Acceptance doesn’t say HOW the server was compromised, and didn’t identify what kind of server was in use. Was it an FTP server, a service like Dropbox, a proprietary server with remote access, or something else?

But more troubling to me is that FINRA goes on to say that the firm “failed to take adequate steps to monitor or audit the vendors’ performance.” Now hold on. One benefit of leveraging third-party vendors is that they bring expertise to the table that the firm doesn’t have, like, oh, I don’t know, cybersecurity expertise.

But for FINRA to say that the firm failed to test and verify the security of the cloud servers, that just doesn’t seem right. The firm doesn’t HAVE the expertise in cloud server security, which is why the firm hired the third-party vendor in the first place, but now FINRA says that the firm is the one that has to verify the security of the third-party vendor that it hired to bring security expertise to the firm? How is that even possible?

What I do know is FINRA just levied a heavy fine on a firm because their third-party vendor had a hole in their security that was exploited by hackers, and in my opinion, that’s a troubling precedent that has been set.] A Lincoln Financial Group subsidiary on Monday agreed to accept a $650,000 fine leveled by the Financial Industry Regulatory Authority and implement tighter security protocols after hackers in mid-2012 accessed its cloud server and lifted the confidential records of roughly 5,400 customers.

Here are the stories that didn’t make this week’s broadcast:

WisdomTree Makes Strategic Investment in AdvisorEngine from WisdomTree

WisdomTree Investments, Inc. announced that it has invested $20 million for a 36% equity interest in AdvisorEngine, formerly known as Vanare, an end-to-end digital wealth management platform which enables individual customization of investment philosophies.

PIEtech℠, Inc. Unveils Integration with MX for Aggregation and Personal Financial Management Functionality from PRWeb

PIEtech℠, Inc., the creator of the industry’s leading financial planning software, MoneyGuidePro®, today unveiled a new integration with MX to deepen the availability of aggregation for MoneyGuidePro® subscribers and add personal financial management (PFM) functionality via the client portal.

Combined Envestnet and Yodlee Data Offering Supports Morgan Stanley Wealth Management from PRNewswire.com

Envestnet | Yodlee and its parent company Envestnet, today announced a partnership for the combined organization, providing data aggregation, digital applications and data reconciliation solutions to Morgan Stanley, one of the largest, most established wealth management businesses in the industry.

Watch FPPad Bits and Bytes for November 18, 2016

FPPad Bits and Bytes for October 31

Posted on October 31, 2014 by Bill Winterberg in Bits & Bytes

What a wild week! Schwab announces its “free” (except for ETFs expense ratios) online automated investment solution, and then Wealthfront and Personal Capital proceed to secure a combined $114 million in additional venture capital. While I originally titled this update as It’s now a robo-eat-robo world, I’m sticking with the conventional FPPad Bits and Bytes update.

FPPad Quick Hits

Schwab introduces its ultra-low cost, dare I say “free,” Schwab Intelligent Portfolios online platform; investors only pay underlying ETF expenses
Wealthfront raises $64 million for a total of $129 million in venture capital, AUM is now $1.4 billion
Personal Capital raises $50 million of its own for a total of $104.3 million in venture capital
FINRA says it’s hiring a “handful” of people with cybersecurity expertise, so hopefully the new auditors will know a thing or two about holes in broker-dealer security

Schwab to offer free ‘robo-advice’ from Reuters

[Let me pose a few questions: Will Schwab’s ultra low cost investment service lure customers away from startups like Wealthfront, Betterment, Future Advisor, and others who charge anywhere between 15 and 40 basis points for automated investment management? Will investors pay a premium for modern web design and mobile app access to their investment portfolios? Schwab’s Intelligent Portfolio website looks really bad compared with ones published by the startups. It’s Hal, only with a blue eye instead of red. Because the color blue conveys trust, correct? Then, Is Schwab’s brand recognition significant enough to influence the “buying” decision of investors shopping around for low-cost investment services?] Charles Schwab Corp confirmed on Monday that it will introduce free automated investment plans picked by computer algorithms in the first quarter of 2015.

Wealthfront CEO Adam Nash explains his plans for that $100 million pile of cash from Pando.com

[Wealthfront has now raised $129 million in venture capital with its latest round of $64 million. Here are some more questions: Does anyone outside of Wealthfront know what they’re going to do with $100 million? From reading most coverage, I think the answer is no. Look, VC investors certainly want an exit from Wealthfront (and from all of their investments), and despite what Adam Nash says in this article about independence, Nash should expect some pressure from his investors should the company fail to meet expectations over the next several years. Nash cites independence from Wall Street. Ok. But Wall Street doesn’t care about Wealthfront because Wealthfront isn’t stealing any of Wall Street’s customers (yet). Wealthfront is till squarely focused on the Silicon Valley-startup-entrepreneuer-Millennial population and has yet to strongly deviate from that target market. At least, that is, until that market is saturated and loses momentum.] Wealthfront is rolling in cash. The company announced this morning that it raised $64 million in a Series D round led by Spark Capital. The funding follows closely on the heels of the company’s $35 million Series C in April of this year, a pool of capital that it has yet to even touch, and means that it now has more than $100 million in cash in its war chest.

Personal Capital Adds $50 Million As Digital Financial Management Bulks Up from TechCrunch.com

[Personal Capital is NOT a low-cost online investment service. It’s a startup that closely resembles the business model of a traditional RIA, but one that has built an impressive array of technology tools. Chief executive Bill Harris keeps stressing that the company is delivering digital wealth management, and the company does employ somewhere around 100 human advisers in Denver and Redwood City. Chances are, Personal Capital is not very different from most large RIAs managing around $1 billion, but they’re able to attract outside capital to support growth. One difference is that their technology is all built in-house, while I suspect the majority of your technology comes from your custodian or third-party software providers.] In the latest news, Personal Capital, a provider of electronically enabled wealth management services, said it has raised $50 million in a new round of financing.

Wall Street watchdog to bolster reviews of brokerage cyber security from Reuters

[Wait, so the people FINRA is sending TODAY to audit the security of broker-dealer firms AREN’T experts in technology? Better late than never to announce they’re going to hire a “handful” of examiners with technology expertise to look for security holes. But expect the SEC to do the same, as your exams are going to dive much deeper into the software, hardware, and security policies in place at your firm.] Wall Street’s industry funded watchdog plans to intensify its scrutiny of cyber security practices at brokerage firms in 2015 and is hiring technology savvy examiners to help boost its efforts, an official said on Wednesday.

FPPad Bits and Bytes for March 28

Posted on March 28, 2014 by Bill Winterberg in Bits & Bytes

On today’s broadcast, cybersecurity takes center stage at FINRA and the SEC, what you need to do to protect your business from attacks. Amazon launches its cloud desktop service to the public. Does this mark the end of plain old desktop in your business? And two growing providers form a new joint venture to take your portfolio management efficiency to the next level.

So get ready, FPPad Bits and Bytes begins now.

(Watch FPPad Bits and Bytes on YouTube)

Today’s episode is brought to you by Orion Advisor Services, the nation’s largest privately held portfolio accounting service bureau.

Providing full-service data reconciliation, advisory fee billing, Salesforce integration, mobile apps and more, Orion believes it’s time for you to enjoy your business again. Visit fppad.com/orion for more information.

Here are the links to this week’s top stories:

Top Cybersecurity Threats for BDs, Advisors from ThinkAdvisor, and

SEC Cybersecurity Roundtable Webcast from SEC.gov

[Leading off today’s broadcast is an update from FINRA and the SEC highlighting cybersecurity threats faced by advisors and broker-dealers. In a roundtable event held in Washington DC this week, regulators and industry representatives acknowledged that the number one cybersecurity threat to firms of all sizes is the unauthorized account takeover.

This happens when a hacker compromises an investor’s username and password credentials, or manages to take control of an investor’s email account. The hacker then proceeds to liquidate holdings and transfer money to outside accounts, or even poses as a client with a convincing story to get advisors to transfer funds to an outside account, a clever tactic known as spoofing.

Both FINRA and the SEC acknowledge they must play a role in this area, but neither provided details on what exactly that role should be, and if any advisor exams are to include cybersecurity audits, they are likely to start in the fall of 2014 at best.

Until then, here’s what I recommend you do: First, update your compliance manual with policies for what you do when faced with a cybersecurity attack.

Second, train everyone in your organization so they’re familiar with the common tactics from hackers, including phishing, spoofing, and reverse social engineering. And finally, invest in technology to boost your security, like activating multi-factor authentication, deploying firewalls, and even using phishing simulation software that I highlighted in episode number 115.] The top risks broker-dealers face in dealing with cybersecurity threats are operational risk, “insider” risks posed by rogue employees and hackers penetrating BD systems, Daniel Sibears of the Financial Industry Regulatory Authority said Wednesday at the Securities and Exchange Commission’s cybersecurity roundtable.

Amazon WorkSpaces, Amazon’s Cloud Desktop Service, Launches To Public Along With New Sync Client from TechCrunch, and

Amazon WorkSpaces from Amazon

[Next up is news from Amazon, as the company announced the general release of its virtual desktop solution to the public called WorkSpaces.

WorkSpaces is squarely aimed to take on other virtual desktop providers like Citrix, VMWare, and Microsoft, and with pricing ranging from $35 to $75 per month for each user, WorkSpaces is roughly half the price of the competition. If you’re looking to get rid of your aging server and move all of your core software to the cloud, Amazon WorkSpaces just became a very compelling option.

Plus, with the introduction of a new WorkSpace Sync application, you can backup and synchronize up to 10GB of documents between your WorkSpaces, the Amazon Simple Storage Service, and even your local desktop computer. This gives you a secure and reliable document storage alternative to consumer services like Dropbox, Box, Google Drive, and Microsoft OneDrive that you might be using today.] Amazon WorkSpaces, the company’s virtual desktop computing environment introduced last fall at the AWS re:Invent conference, is today available to the public.

Orion Advisor Services, LLC and Total Rebalance Expert (TRX) Form Joint Venture; Announce Technology Integration from PRNewswire.com

[And finally, two popular providers in portfolio management and rebalancing software, Orion Advisor Services and Total Rebalance Expert, announced a new joint venture this week called the “Total Technology Platform.”

The two companies first integrated their solutions back in October of 2012, enabling the import of account, transaction, and tax lot data from Orion directly into TRX with a single click.

But this latest venture goes beyond bidirectional integration, as users of Orion will now be able to access TRX directly from within the Orion platform. At the same time, both companies said they are committed to maintaining open-architecture platforms rather than hold advisors captive to one bundled solution.

Orion users can still take advantage of integrations with Blaze Portfolio, iRebal from TD Ameritrade Institutional, and Rebalance Express from RedBlack Software, and TRX users can continue to import data from Morningstar Office, Portfolio Center from Schwab Performance Technologies®, Advent’s Black Diamond Performance Reporting and more.] Total Rebalance Expert (TRX) and Orion Advisor Services, LLC (Orion) announced today a joint venture between the two companies to provide a “Total Technology Platform” designed to simplify and streamline the portfolio management process.

Here are stories that didn’t make this week’s broadcast:

Box Unveils First Standalone Product And New API Pricing At Inaugural Dev Conference from TechCrunch

New Kitces Network to Target Planners for Gen X & Y from Financial Planning

Office 2 HD for iPad is now Citrix ShareFile QuickEdit, drops $7.99 price to become free via iTunes

Watch FPPad Bits and Bytes for March 28, 2014

FPPad Bits and Bytes for June 21

Posted on June 21, 2013 by Bill Winterberg in Bits & Bytes

For financial advisers, integration, no matter how simple or complex, leads to higher revenue, profitability, and income says one survey.

Here are this week’s stories of interest:

What I Learned from Getting Robbed: Part 1 from Advisortechbuzz.com

[This is a last-minute addition to this week’s Bits and Bytes. Here’s a personal story from Commonwealth’s Justin Unton about a robbery at his house and the theft of a bunch of his electronics. Unton strongly advocates the use of two-factor authentication (see: How to enable two-step verification on your LinkedIn account) which renders these devices and online logins useless without access Unton’s mobile phone. Let this be a lesson to us all: turn on two factor authentication wherever you can to give yourself an additional layer of protection in the event something like this happens to you.] At first, we thought it was our cat, Oscar, who had caused the mass destruction in our living room. We even laughed it off, thinking that he must have seen a fly and done his best puma impression to track it down and pounce on it. That all changed as we went down the hallway to our bedroom and saw the contents of our drawers strewn about the floor.

Envestnet | Tamarac White Paper: Technology Integration Leads To 20% More Annual Income For Advisors from Marketwatch.com

[I think it’s generally common sense to equate the use of integrated software tools with increased profitability. But just in case you have your doubts, here’s a white paper compiled from an Aite Group survey that demonstrates this fact. So what is “some degree” of technology integration? The white paper says it’s single sign-on, manual data sharing, automatic data sharing, and cross-product functionality. Want a copy of the white paper? Visit http://tamaracinc.com/White-Paper-Download.aspx and offer your contact information.] Envestnet | Tamarac, part of Envestnet, Inc., a leading provider of integrated web-based portfolio and client management software for independent advisors and wealth managers, has released a white paper showing that financial advisors at independent RIA practices with some degree of technology integration earn approximately 20 percent more in annual income than their counterparts at independent RIA practices with no technology integration.

AssetBook rolls out mobile portfolio management application from InvestmentNews.com

[AssetBook joins other portfolio management software providers including Black Diamond and Orion Advisor Services (see: Eric Clarke, President of Orion Advisor Services, on additional integrations and mobile apps) in offering a native mobile app advisers can use to view portfolios.] AssetBook LLC announced Friday the release of AssetBook Mobile: a native application for devices running both iOS and the Android operating system.

Smarsh, an archivist for the information age from OregonLive.com

[Smarsh routinely appears on FPPad for email and social media compliance. Clearly they’re a popular service provider among their regulated financial service customers, and that popularity has resulted in dramatic growth of what was once a small start up in the Pacific Northwest.] Companies used to wish away their old correspondence. Old letters were a legal liability, the thinking went, and ought to be destroyed. Smarsh has built one of Portland’s fastest-growing tech businesses by taking the opposite approach, contending that in the information age nothing is ever really gone.

Dell owns 60 percent of Smarsh, with an option to buy more from OregonLive.com

[This is a sidebar to the Smarsh article above, but I felt it important enough to break it out separately. Did you know Dell, yes, that Dell, now owns 60 percent of Smarsh? I didn’t either. That news managed to fly under my radar.] Companies that produce the kind of growth that Smarsh has inevitably attract suitors. But don’t look for a buyout at Smarsh: It’s already happened.

Tweet this: Finra spot-checking firms for social media compliance from InvestmentNews.com

[Surprise, surprise, FINRA is checking broker-dealer rep’s use of social media! It’s not breaking news, FINRA is doing what they’re supposed to be doing; their job! Still, if these spot-checks scare you, here’s what you need to have: 1) A compliance manual that includes your social media policy, 2) documentation that reps are periodically trained, and 3) a monitoring and archiving system that contains the history of social media posts. Is there anything I left out?] The Financial Industry Regulatory Authority Inc. is doing social-media compliance spot checks on some of its member firms. In a notice posted Monday on Finra’s website, the regulator said it wants broker-dealers to identify the sites used by a firm, as well as all individuals who post or update the firm’s content on social-media sites.

FPPad Bits and Bytes for April 5

Posted on April 5, 2013 by Bill Winterberg in Bits & Bytes

This week, a registered rep’s YouTube video on annuities lands him in hot water.

My lesson learned from this week: Completely block out a few days each month in my calendar for rescheduling events. Things don’t always go according to “plan,” so it’s a lot easier when I have a few unscheduled days available in the future rather than try and compress existing commitments to squeeze in a rescheduled event.

Here are this week’s stories of interest:

YouTube Annuities Videos Lead To Fine And Suspension from Forbes.com

[So a registered rep for First Heartland Capital, Inc., Ralph William Hicks Jr., created and posted videos to YouTube about equity index annuity (“EIAs”) seminars. FINRA alleged that Hicks’ marketing materials, including the YouTube videos, “presented oversimplified claims which omitted material information, or failed to provide a sound basis for evaluating the facts.” So what’s your lesson in all of this? If you’re going to market on YouTube (or any online site), you’d be better off avoiding specific details about products, including annuity guarantees and risks, and rather address general financial planning principles or opportunities NOT linked with particular products. But if you do mention products, you probably ought to provide a conspicuous link to disclosure material at a minimum.] While registered with First Heartland during approximately 2009 through 2011, the AWC alleges that Hicks disseminated to some 200 to 1,000 members of the public: advertising and sales literature to the public in YouTube videos; invitations to seminars and workshops; and letters concerning, among other things, bonus incentives.

Book Review: Technology Tools for Today’s High-Margin Practice from the Journal of Financial Planning

[Bruce Colin, CFP® provides an honest, unbiased review of the new edition of Technology Tools for Today’s High-Margin Practice, updated by Joel Bruckenstein and David Drucker featuring multiple contributions from a variety of authors (of which I am one). Read Colin’s review for the best chapters of the book and why this edition is “required reading” for advisers. You can buy a copy using this affiliate link or just search for it on Amazon.] Required Reading for Tech-Savvy Planners: Latest Drucker-Bruckenstein book disappoints in some areas, but still worth the investment.

Technology blueprint for a typical RIA firm from InvestmentNews.com

[Nexus Strategy founder Tim Welsh makes a (first?) guest appearance at InvestmentNews to cover the programs and applications most used by financial advisers. Data for this article was obtained from the 2013 InvestmentNews Technology Study. But one opportunity for improvement: avoid burying the lead.] The overwhelming success of the independent-adviser segment is transforming the financial services industry. With over $2 trillion in assets, independent registered investment advisers continue to be the fastest-growing segment and as a result are attracting investments by technology firms to penetrate this growing marketplace.

Biggest Tech Trends Now from Financial-Planning.com

[In this recap of February’s Technology Tools for Today conference, Joel Bruckenstein covers the biggest trends observed: data security for financial advisers, protecting mobile devices, ramped-up custodian technology, touchscreen interfaces, and Windows 8.] The interest in security among independent advisors seemed to have ratcheted up. Perhaps it’s because major custodians have acted to heighten advisor awareness of attacks, or it could be increased media coverage of Chinese hackers targeting U.S. websites – but either way, it was one of the key questions for attendees at February’s Technology Tools for Today conference.

Salentica Releases Laser App Integration to Enable Advisors to Reduce Time Spent On Form Filling from PRWeb.com

[Streamlined form filling is almost a required technology for the progressive advisory firm. Laser App is the 800-pound gorilla in form-filling software, so it’s imperative that other technology vendors integrate with them in some way. Here’s the latest CRM integration from Salentica, the Microsoft Dynamics CRM overlay provider for financial services. They’re still tiny with respect to their user base among advisers, but supporting integrations such as this will help boost its adoption in the marketplace.] Salentica Inc., a market leader in providing innovative Client Relationship Management (CRM) and Client Reporting technology solutions for the wealth management industry, announced today the general availability of its integration with Laser App within its CRM software.

ShareFile adds SEC and FINRA compliance capabilities with Archiving for Financial Services

Posted on April 2, 2013 by Bill Winterberg in Compliance, Technology

The popular online file sharing service meets regulatory record-keeping requirements with latest archiving functionality

ShareFile Archiving for Financial Services

In a press release today, ShareFile, the online file sharing service owned by Citrix, announced the availability of its Archiving for Financial Services compliance feature.

ShareFile, my 2012 Morningstar Advisor Best Back-Office Technology award winner, has been popular among financial advisers for its online file storage functionality much like Dropbox, Box, SugarSync, Google Drive, Microsoft SkyDrive, and many more.

But ShareFile’s focus on the specific needs and regulatory requirements of professionals in financial services has helped the company gain a sizable following relative to the generic competition.

According to the press release, ShareFile Archiving for Financial Services helps financial advisers satisfy SEC and FINRA record-keeping requirements “by offering retained, indexed, auditable and searchable records of client communications for the period required or longer.”

Below is a video from ShareFile with an overview of Archiving for Financial Services.

(Click to watch on YouTube)

Consolidating Two Systems

Typically, advisers who use online file sharing services to exchange documents with clients and prospects maintain two separate systems in their back office.

One system is the online file sharing service that does just that; facilitates file sharing with individuals outside the adviser’s network infrastructure.

But most advisers then maintain a second system that satisfies the record-keeping requirements imposed by the SEC and FINRA. Two systems are necessary, because consumer file sharing services (i.e. Dropbox) just aren’t built with the regulatory record-keeping requirements in mind.

For advisers using ShareFile Archiving for Financial Services, two systems should no longer be necessary to satisfy the record-keeping requirements.

A Document Management Solution?

With the addition of Archiving for Financial Services, is ShareFile now a contender among document management providers?

I believe the answer is no.

Archiving for Financial Services is a very useful addition, and it will eliminate the need to run two separate systems to facilitate file sharing and to maintain adequate record-keeping systems. But document management requires more than just indexed, auditable, and searchable records of client communications.

Document management systems offer metadata tagging and document profiling for every record stored in the system, and automated workflow is also frequently supported.

So for advisers who lack a true document management system (and surveys consistently show that there are a large number of such firms), ShareFile combined with Archiving for Financial Services is a convenient way to get two features from the same product.

But for firms already using document management systems with native record-keeping compliance, Archiving for Financial Services is unnecessary.

Nevertheless, ShareFile’s ease of use and mobile device compatibility still makes it a strong contender for online file sharing with clients, prospects, and colleagues.

For more details about Archiving for Financial Services, visit the ShareFile Blog and read New feature allows ShareFile to help financial firms achieve compliance

How to hide endorsements from your LinkedIn profile

Posted on October 5, 2012 by Bill Winterberg in Compliance

Advisers must hide LinkedIn Endorsements to avoid compliance violations

Update 01/21/2013! LinkedIn is rolling out completely new profile designs to users, changing the way Endorsements are managed. Go read How to hide LinkedIn Endorsements on the new LinkedIn profile design now and watch the screencast reflecting the new changes.

As a financial adviser, you’re well aware that you can’t use client testimonials in any of your marketing materials. SEC and FINRA regulations prohibit the use of client testimonials (see: Adviser Use of LinkedIn May Violate SEC Rules).

LinkedIn’s latest feature called Endorsements, opens up another issue for financial advisers with LinkedIn profiles. Anyone can visit an adviser’s LinkedIn profile and endorse specific skills and expertise. Considering the broad language against client testimonials, allowing such endorsements should be avoided.

So how do you remove or disable Endorsements from showing up on your profile?

In the screencast below, I walk you though two ways you can prevent Endorsements from showing up on your public profile.

Watch the screencast now and hide any public endorsements on your own profile to avoid triggering compliance violations.

FPPad Bits and Bytes for November 11

Posted on November 11, 2011 by Bill Winterberg in Bits & Bytes

I’ve been back in Dallas for a week, but I still have yet to review and edit my notes from Schwab IMPACT 2011. Soon I hope to have two or three new updates on my feedback from conference breakout sessions, but consulting, new content development, and family obligations take precedence. Still, I’ve kept my pulse on the wires this week for the best in technology stories for financial advisers.

First, if you have a website, but are wondering what you can do to take it to the next level and convert visitors to clients, read this month’s column on Morningstar Advisor, How Marketing Automation Can Accelerate Client Growth.

All the major media outlets were on site at Schwab IMPACT 2011, so there were a number of stories released this week regarding related announcements. Most of them were good, but in this case, video content did a better job of addressing what the custodian is doing with its technology platform for advisers than print.

Here are two video updates from Schwab IMPACT worth viewing, one from InvestmentNews’s Davis Janowski interviewing Neesha Hathi and a second from James J. Green’s AdvisorOne, also interviewing Neesha Hathi.

Advisor Tested: Arkovi expands and archives a firm’s online footprint from RIABiz.com

[As an adviser in a regulated industry, you can’t tweet, post to Facebook, or interact on LinkedIn if it’s related to your business unless you archive and supervise your records. One tool that facilitates your compliance obligations is Arkovi, and Judy Messina gives a good rundown in this RIABiz Advisor Tested story.] As registered investment advisors flock to Twitter, Facebook and other social-media sites to establish themselves as thought leaders and connect with customers and other investment professionals, storing and keeping track of tweets, posts and other content for compliance purposes can seem like an exercise in herding cats.

And in related news, I think you might care a little bit about what might happen with the future of regulatory examinations for investment advisers.

Let RIAs Foot Their Own Examination Bill, Report Says from FA-Mag.com

[In a report commissioned by TD Ameritrade Institutional, Georgetown University finance professor James J. Angel proposed that RIAs should pay for their own periodic compliance examinations conducted by an outside third party. There’s merit to this idea, as RIAs who take custody of client assets today must subject themselves to (and pay for) a surprise audit by an independent public accountant that is registered with the Public Company Accounting Oversight Board (PCAOB).] Instead of the Securities And Exchange Commission (SEC) or the Financial Industry Regulatory Authority (Finra) examining RIA firms, the firms themselves should foot the bill for their own periodic compliance examination by using an outside body.

1 2 3 Next →

FPPad