News | 02.04.20
SEC Sweep of 403(b) Plans Puts Advisors on High Alert
If you haven’t gotten a letter from the Securities and Exchange Commission (SEC) about teacher retirement plans, consider it a window of opportunity to clean up any errant compensation and supervision practices, attorneys from the law firm of Drinker Biddle said during a conference with 1,100 securities industry and compliance executives. Since last June when the SEC launched its “sweep” examination to inquire into the sales practices applicable to retirement plans for teachers, broker-dealers and third-party administrators have been getting letters from SEC examiners asking for details about their compensation, their supervision practices and potential conflicts of interest, the lawyers said during a Drinker, Biddle “Insider the Beltway” audiocast. The letters help the SEC determine whether violations have occurred in the burgeoning 403(b) market, which held $1.1 trillion in assets as of fourth quarter 2019 and has been a magnet for aggressive sales tactics. “The moral of this story is the time is now for firms to look at their fees and supervisory procedures and make sure they’re following regulation,” added Drinker Biddle partner Fred Reish, who said the sweep is focused on both broker-dealers and dually registered investment advisors.
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