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Mar 8, 2010 4:22 pm

Read two notable books over the weekend.
#1 - “The RIA’s Compliance Solution Book:  Answers for the Critical Questions”.  Since I am serving for now as my own CCO, I decided to bone up on compliance.  This wasn’t the easiest reading book, but what would you expect from the title?  All-in-all, pretty straightforward for the topic.  The book is written from the standpoint of an SEC registered advisor.  The section on compliance programs was a little scary, in that it basically outlined a compliance department.  As a sole practitioner, I would have to be a full on Schizophrenic to comply with SEC rules as outlined by the book.  Another thing that jumped out at me - if you deduct fees directly from client accounts, you are deemed to be in custody of client funds or securities.  My question would be in context of the new regs requiring annual surprise audits for RIA’s with custody, is that particular aspect exempt?  Maybe Wet Blanket could answer that question.
#2 - “In Search of the Perfect Model:  The Distinctive Business Strategies of Leading Financial Planners”.  This book was an excellent read.  The author sat down with some of the most succesful players in the business and dug down to what made them that way.  The cool thing was that most of them had a radically different approach.  I particularly liked the section on niche practices.  It would be great to eventually have a multi-client family office, but where I live, I don’t think its in the cards anytime soon.  I would recomend this to only my fee-based bretheren, as it fairly well excoriates commision products and reps at various points.

Mar 8, 2010 4:48 pm

I own the first book, my wife got it for me for Christmas - a bit pricey if you ask me.  I actually found the book a little light.  I would recommend “Investment Adviser Regulation” In A Nut Shell by Jeffrey J . Haas and Steven R. Howard.  It is a book that you will not read cover to cover, but just flip to the pages you need.
Under the new Custody regs, deducting fees does not give you custody - praise Jesus.  However, make sure you don’t have a full POA on any client account, or you don’t serve as Trustee on any client account - that will give you custody.
I’m currently reading “Confessions of a Wall Street Analyst” by Dan Reingold.  Don’t know how accurate / bias it is, but it is a great read.

Mar 8, 2010 4:49 pm

Also, since you are your own RIA, you may want to consider joining a group that will provide you types and tools on RIA compliance.  I suggest

Mar 8, 2010 5:46 pm

Their website looks like it could be very useful.  Do you know what the cost is?  Contact us = $$$$ most of the time in my experience.

Mar 8, 2010 5:49 pm

Yes I do, but PM me.
What I like best about them is that they’ll send you a weekly newletters (electronic or print or both) that includes everything going on in the industry (compliance-wise), they constantly interview firms for best practices, they have a tool box where you can download things developed at other firms (like a compliance schedule, risk matrix, etc.), and they have an online forum where you can ask the group for advice.
Since your name is tied to the forum, it is usually much nicer over there.