Editor’s Note: CARDS would be subject to the regulatory standards and processes set in the Paperwork Reduction Act.
From: bank investment consultant
by: Dave Lindorff
Keith Laterrade knows a thing or two about floods. When Hurricane Katrina swept ashore in 2005, his office in New Orleans’ Gulf Coast Bank ended up underwater. Laterrade weathered that storm but now faces another flood — not from Mother Nature this time but one that is more widespread: paperwork.
“My associate and I have to look around piles of paper just to see each other sometimes,” he says. “Suitability and alternatives, FINRA’s focus on those issues has us doing a lot of paperwork.”
Indeed, FINRA has tightened regulation and compliance monitoring of broker-dealers over the past year or so, making sure that the investments being recommended to clients are suitable.
Of particular concern are 401(k) rollovers, which are becoming increasingly common as the 76 million baby boomers begin to hit retirement age. Also closely watched are alternative investments, the documenting of all “hold” recommendations, and conflict of interest issues.
There also is widespread concern in the industry over a new proposal for a comprehensive automated risk data system, or CARDS. If adopted by FINRA and approved by the SEC, it would require broker-dealers to “collect, on a standardized automated and regular basis, account information, account activity and security identification information that a firm maintains as part of its books and records.”
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