The SEC recently announced two enforcement actions against advisory firms that failed to provide clear and consistent disclosures around conflicts of interest tied to fee-based managed account programs. Both cases underscore the Commission’s continuing focus on how financial incentives influence employee recommendations — and the need for firms to adopt policies and procedures that address disclosure risks.

Advisers and broker-dealers face heightened regulatory expectations around transparency. Compensation arrangements that create incentives for employees to recommend firm products must be disclosed accurately and consistently across Form ADV, Form CRS, websites, and client communications. Misaligned or contradictory disclosures not only erode client trust but also invite significant penalties. Read the full article from our friends at SEC³ here.