State inspectors find fewer problems among investment advisers

State securities regulators today reported a drop in deficiencies in their latest inspections of investment advisers. The North American Securities Administrators Association Inc. said that 458 examinations of advisory firms found 1,887 deficiencies in 13 compliance areas, down from 2,135 deficiencies in 13 compliance areas among 418 firms in 2007 when a similar review was last conducted. Both reviews were conducted Jan. 1 to May 31. NASAA, which represents regulators in the 50 states, the District of Columbia, Puerto Rico, Canada and Mexico, also released an updated list of recommended best practices that investment advisers should consider in order to improve their compliance practices and procedures. That list includes reviewing ADV disclosure forms to make sure they are consistent with promotional brochures, updating all customer contracts, maintaining client profiles, keeping accurate financial records and maintaining written compliance manuals. “Our goal is to help investment advisers minimize the risk for regulatory violations by strengthening their internal compliance programs,” NASAA president and Texas Securities Commissioner Denise Voigt Crawford said in a release. The reviews were conducted in 35 states and Canadian provinces by NASAA's Investment Adviser Operations Project Group. NASAA performs coordinated exams of advisory firms in odd-numbered years and similar exams of broker-dealer firms in even-numbered years.