Effective Disclosure of Investment Adviser Conflicts - Now More Important Than Ever

01 May 2012 Publication

Practical Compliance & Risk Management for the Securities Industry

The events of 2008 and 2009, including the publicity surrounding the frauds perpetrated by Allen Stanford and Bernie Mado , caused investors, Congress, the SEC and other regulators to focus on con icts of interest in the investment adviser/client relationship. Much of the Dodd-Frank legislation, as well as regulations recently adopted by the SEC and other regulators, have been a direct result of this renewed attention to conflicts of interest. In fact, the conflict of interest disclosures required as part of the new Form ADV brochure are perhaps the best example of this new paradigm as well as the best means to address and manage conflicts of interest.

This article will discuss:

The legal framework governing investment adviser conflcts of interest;

  • How to identify conflicts of interest;
  • How to effectively disclose conflicts of interest to clients in your Form ADV brochure and elsewhere; and
  • Tips for investment advisers and CCOs to implement as part of their compliance programs for disclosing, managing, and, where possible, avoiding conflcts of interest altogether.

Read more.