Regulatory Review Checklist: Top three items you will need on-hand when it comes to Advisor Education Activities

Tuesday, May 13th, 2014 and is filed under AI Insight News

Considering the sheer size of the financial industry in the United States, you may think the odds of a regulatory review are fairly slim. However, FINRA Chairman and CEO Richard Ketchum recently stated that while FINRA regulates about 4,100 brokerage firms and about 635,000 registered securities representatives, “we are out there on the ground and in the field every single day—in offices all across the country—overseeing virtually every aspect of the securities business.”

For broker dealers, it’s not a question of IF you will be subject to a regulatory review— it’s a matter of WHEN.

The volume of information regulators will ask to see in the event of a review can be overwhelming and difficult to compile – particularly when it comes to the area of advisor education. There are three topics related to Financial Advisor education and training a reviewer will most likely want to examine:

#1 Selling Agreements

Regulators will want to form a comprehensive view of the types of programs and products your firm’s advisors are selling. Your firm will need to be ready to produce copies of all current and past selling agreements.

#2 Tests

Firms must be ready to show regulators that they require advisors to demonstrate a thorough understanding of each offering they sell. A reviewer may ask the firm to provide copies of all tests it has made available to advisors. The tests may be evaluated as to whether they adequately cover program structures, terms, risks, and suitability guidelines.

#3 Testing Logs

Once your firm’s tests have been evaluated, the reviewer will determine whether advisors have taken all required tests. Your firm must be ready to provide a log of tests and training completed (whether passed or failed) by each advisor per alternative investment product. In fact, you may be asked for an advisor’s complete educational history including continuing education and specific product/sector training.

The challenge of finding and organizing all this information is enough to stress even seasoned compliance professionals. Thankfully, AI Insight offers a simple solution.

With a subscription to AI Insight, documents and records are available to you in an instant – whenever and wherever you need them.

AI Insight provides prospectus based education modules/tests to help your firm meet FINRA NTM: 03-71, 10-22, 05-26. The AI Insight system allows you to access financial advisor training information quickly and easily ––from material covered to testing scores. AI Insight subscribers can also create reports on demand, including Consolidated Compliance Logs, Continuing Education Completed, as well as Current/Past Selling Agreements.

Remember, when you find your firm facing an audit or review, an AI Insight subscription means your critical information is always ready, organized, and accessible.

Call 877.794.9448 #715 to schedule an introduction to AI Insight.