Meeting the SEC’s New Disclosure and Brochure Requirements

Dec. 7, 2010 - PRLog -- As a professional in the securities industry or a registered investment advisor, you need to make sure you know about and understand the new changes coming to advertising and disclosure.  The Securities and Exchange Commission made the new rules effective on October 12, 2010.  

The new disclosure and brochure requirements include adding information about background education, business experience, disciplinary actions in a “narrative brochure written in plain English” in order for consumers to thoroughly understand the agent and company they are considering.  Agents must now provide:

- disclosure and reasonable conflicts of interest in an active voice using plain English;
- a brochure in hard copy or electronic format including cover page with name of business, address, contact information and website; material changes since last annual update; table of contents; list of advisory business services; fees and compensation, whether performance based or set; management structures; types of clients; method of analysis and risk of loss; disciplinary information; and more.  

Rule 204-3 also requires that each firm brochure be accompanied by brochure supplements providing information about the advisory personnel on whom the particular client receiving the brochure relies for investment advice.  Among other things, the brochure supplements will contain information about the educational background, business experience, and disciplinary history (if any) of the supervised persons who provide advisory services to the client.

The brochure supplement thus includes information that would not necessarily be included in the firm brochure about supervised persons of the adviser who actually provide the investment advice and interact with the client. To comply with disciplinary action disclosure, the SEC is allowing registered agents to link to FINRA’s BrokerCheck (http://brokercheck.finra.org/).

To view a copy of the full text of the rule please visit bit.ly/hPEVK0.  

The Certified Senior Advisor (CSA)® designation was accredited by the National Commission for Certifying Agencies (NCCA) www.noca.org on September 11, 2008.  With the accreditation, the designation now meets the requirements of the NASAA and NAIC Model Rules and most this state’s legislation.  The CSA Board of Standards upholds CSA members to the standards of the Model Rules through enforcement of the CSA Code of Professional Responsibility, a copy of which can be reviewed at http://www.csa.us/docs/csa_code.pdf.  

Please contact the Society of Certified Senior Advisors at (303) 757-2323 or visit www.csa.us if you have any questions.

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SCSA educates professionals to work more effectively with their senior clients. That means understanding the key health, social & financial factors that are important to seniors — so you can find success in the senior market.