What RIAs need to avoid in the coming year is a failure to communicate.
At least if they are seeking to stay the cool hand of the SEC, that is.
In light of recent regulations, the highest SEC priority for RIAs in 2025 appears to be highly related to recordkeeping and “off-channel” communications, according to Joseph C. Antonakakis, lawyer and member of the investment management and securities practice at Stark & Stark.
“We have seen hundreds of millions of dollars in fines in the last year for firms who fail to monitor and archive their firm’s communications with clients or internal business-related communications. RIAs should talk to knowledgeable attorneys who can explain what should be monitored and archived,” Antonakakis said.
Aside from keeping close track of their communications, Antonakakis said RIA firms also better keep a close eye on new SEC marketing rule updates, especially regarding client testimonials and performance advertising. He pointed out that in addition to testimonials and performance advertising, third party endorsements are being scrutinized, as are advertisements containing rankings and awards.
“We have seen fines in the hundreds of thousands for failure to comply with the provisions of the marketing rule,” Antonakakis said. “Complying with the SEC marketing rule means understanding the marketing rule, and there’s no better way to understand it than to work with legal counsel who can assist with explaining the requirements and reviewing a firm’s marketing material/websites.”
Antonakakis said he reviews dozens of RIA websites and advertising pieces every week to help identify material that does not comply with the marketing rule – and then helps make it compliant.
Data security also remains a top concern for RIAs in the months ahead. Antonakakis viewed this as a trickier problem and once again urged wealth managers to get legal counsel when preparing a manual. He also advised working with a third-party IT vendor, or experienced internal IT person, who can assist with “ensuring the firm’s cybersecurity practices and implementations are robust.”
On the flip side, some experts said regulatory enforcement may soften in areas like ESG investing going forward, which may offer RIAs a way to explore new approaches to digital marketing.
“ESG investing will have a bigger focus next year with the likelihood of a lighter regulatory approach,” Kate Wulfken, director of Compliance Risk Concepts, a provider of compliance consulting services to financial institutions, recently wrote in an InvestmentNews opinion piece.
“The changes could reduce compliance burdens, allowing RIAs to align their practices with investor preferences and international standards. These shifts offer the chance to embrace innovation but just as you wouldn’t just speed up on an empty highway, I suggest staying alert to avoid sacrificing accountability or investor trust,” Gibbs added.
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