The SEC’s Office of Compliance Inspections and Examinations (OCIE) has launched a new initiative dubbed “ReTIRE” (Retirement Targeted Industry Reviews and Examinations) focused on retirement savings.
Acknowledging the growing importance of retirement and the broad and changing array of products, the SEC says it will target high-risk sales practices, investments and oversight procedures using data analytics, prior exams and examiner due diligence to identify targets.
Specifically, the SEC says it will review the types of accounts selected by advisors, their due diligence process and recommendations as well as on-going account management. According to a National Exam Program Risk Alert, areas of concern for the SEC include conflicts of interest related to business structure, compensation and personal relationships with service providers.
In its June 22 Risk Alert, the agency warned advisors and BDs that they should be identifying conflicts of interest, addressing any issues and disclosing conflicts to clients. They say they will be reviewing supervisory controls as well as marketing materials.
With nearly $25 trillion in retirement assets, and more than $7 trillion in IRAs alone, it should come as no surprise that regulators are focusing on the growing retirement market. While experienced DC plan advisors have perhaps become accustomed to increased regulatory scrutiny, it might take advisors who don’t work on DC plans a while to catch up.
