End of Year Checklist for Financial Advisors

If you are a financial advisor, closing out the calendar year typically means an increase in client service items as people work to get in their yearly IRA contributions or take their RMDs, or have other issues. And, in many firms, it also means catching up on some compliance issues. As busy as the end of year is, it’s good to stop, take a few minutes, and make sure you are squared away on a few things.

First, let’s talk about registration.December is renewal time for registered with SROs, exchanges and states, and CRD requires firms to pay their renewal registrations by mid December – the date changes each year, for 2018 it is December 17th. If you are registered in more states than you need to be, perhaps because some clients moved, and you are paying your own registration fees, you might want to talk to your firm immediately to see about dropping unnecessary registrations.

Second, the end of the year is a time when many firms asks advisors to complete an annual or quarterly compliance questionnaire. I want to encourage you to take your time with this.Read each question carefully and answer accurately.If a question causes you concern, consult with your attorney or with your firm’s compliance department. You should know that FINRA does often obtain copies of these compliance questionnaires in connection with their investigations of advisors.And, if you report one thing to the firm, but in reality are doing something else – or you omit to disclose something to the firm you are asked about on the questionnaire – that can form the basis for additional charges and sanctions by FINRA.So, be careful.

Next, make sure you are current with any required continuing education.

Be sure to a close look at your Form U4. Make sure that it is current and disclosed any outside business activities- and that you’ve made notice to your firm of those – and that your answers to the disclosure questions are accurate. If you have questions about whether something should be disclosed, I generally recommend consulting with your own legal counsel. Many firms take a ultra-cautious approach and tell advisors to disclose everything just to be safe. But, you don’t want to put something on the U4 if it is not required, as you may have great difficulty in getting it removed, and the unnecessary disclosure may negatively impact your business.

Finally, check your firm’s supervisory procedures or compliance manual, and make sure you’ve ticked off any firm specific action items as well, before you take a break to ring in the new year.

Hope this information helps. If you have an issue that you think we might can be of assistance with, I invite you to contact us via phone.You can also find other helpful information on our website and on our YouTube channel.