2014 Investment Management Compliance Testing Survey Results
Investment Adviser Survey Reveals Compliance Testing Practices and Trends
WASHINGTON and BERWYN, Pa., July 2, 2014
WASHINGTON andBERWYN, Pa., July 2, 2014 /PRNewswire/ --The Investment
Adviser Association, ACA Compliance Group, and Old Mutual Asset Management are
pleased to announce the results of their ninth annual Investment Management
Compliance Testing Survey.
The survey was conducted online from April 24 to May 23 and collected
responses from 369 compliance professionals, representing a range of
SEC-registered investment advisers. The aggregate survey results are now
publicly available on the Investment Adviser Association web site and the ACA
Compliance Group web site.
This year's survey addressed compliance testing with respect to the following
areas: cybersecurity, custody/identity theft/red flags, valuation, proxy
voting policies and procedures, and international regulatory compliance,
including the impact of AIFMD. The survey also contained trend update
questions about whistleblowing, directed brokerage, and hot compliance topics.
Key findings include:
oThe hottest compliance topic in 2014 by far is
cybersecurity/privacy/identity theft, identified by 75% of respondents.
oOther hot compliance topics are social media, advertising/marketing,
custody, valuation, allocation of fees and expenses, disaster recovery,
and FATCA. Hot topics from last year's survey that experienced the
largest declines include regulatory reporting and insider trading.
oDespite claims that advisers widely rely too heavily on third parties for
recommendations on proxy voting decisions, only 33% of firms reported
retaining third parties to assist with recommendations or substantive
voting decisions. Nevertheless, apparently in part to respond to these
claims, on June 30 the SEC staff issued guidance primarily aimed at
investment advisers that retain proxy advisory firms, including policies
and procedures to consider implementing.
oSince last year's survey, compliance testing has increased the most in the
areas of advertising/marketing, cybersecurity/privacy/identity theft,
disaster recovery planning, best execution, and personal trading/code of
ethics. 78% of firms indicated that they have not decreased compliance
testing in any area.
o75% of firms indicated that their compliance testing has detected
non-material issues. Of those firms detecting material issues, the most
common ones were in the areas of personal trading/code of ethics,
advertising/marketing, custody, books and records,
cybersecurity/privacy/identity theft, and disaster recovery planning.
oHalf of firms that invest in marketable securities, and about one-quarter
of firms that invest in illiquid or hard-to-value securities, rely
entirely on independent third parties to value those securities.
oAdvisers that have considered the implications of AIFMD on their business
are most concerned with the remuneration requirements, followed by the
risk management component.
"This year's survey reveals that an exceptionally large segment of the
industry views cybersecurity as a hot compliance topic," said Laura Grossman,
Assistant General Counsel at the Investment Adviser Association. "That's
encouraging because it's in alignment with the SEC's heightened focus on
cybersecurity issues, as shown by the SEC staff's recent hosting of a
cybersecurity roundtable, issuance of a risk alert on a cybersecurity
examinations initiative, and announcement of plans to examine cybersecurity
preparedness. However, many advisers still have work to do to develop their
"The survey results confirmed that members of our industry are committed to
enhancing their compliance programs to address the risks self-identified
through instituted risk management programs as well as the hot issues
communicated by regulators. The survey continues to be a great tool for
communicating industry trends, best practices and practical ideas to assist in
the continual evolution of a firm's compliance program," noted Amy Yuter, Vice
President and Senior Compliance Manager of Old Mutual Asset Management.
"In our 9th year of the survey, it's much easier to identify the trends
emerging for compliance professionals. You can see that the industry takes
the SEC's statements to heart, with the 'hot compliance topics' reported by
respondents mirroring the SEC's current initiatives as promoted in the press.
You can also see the trends year on year and the constant march toward
improvement in the compliance program as well as a continued concern regarding
technology, its uses, its benefits to the compliance team as well as the risks
that it poses," said ACA Compliance Group Managing Director Lynne Carreiro.
"We know compliance professionals have many competing demands on their time,
and we thank all survey participants for their willingness to make the time to
participate in this year's survey."
About the survey organizers:
ACA Compliance Group
ACA Compliance Group (ACA) provides expert compliance consulting and GIPS^®
verification services to investment advisers, private funds, investment
companies, and broker-dealers. For more information, visit
Investment Adviser Association
The Investment Adviser Association is a non-profit association based in
Washington, D.C. that represents the interests of SEC-registered investment
advisory firms. The IAA's membership consists of more than 500 SEC-registered
investment adviser firms that collectively manage approximately $14 trillion
in assets for a variety of institutional and individual clients. For more
information, visit www.investmentadviser.org.
Old Mutual Asset Management
OMAM is a global, multi-boutique asset management company with approximately
$203 billion of assets under management as of March 31, 2014 through a diverse
portfolio of asset managers that serve institutional investors around the
world. Headquartered in Boston, OMAM's business model combines the investment
talent, entrepreneurialism, focus and creativity of leading independent asset
management boutiques with the resources and capabilities of a larger firm.
More information about OMAM, its member firms, and their investment teams and
strategies, is available at www.oldmutualus.com.
OMAM is a subsidiary of Old Mutual plc, which provides life assurance, asset
management, banking and general insurance to more than 14 million customers in
Africa, the Americas, Asia and Europe. Originating in South Africa in 1845,
Old Mutual has been listed on the London and Johannesburg Stock Exchanges,
among others, since 1999. For further information about Old Mutual plc, visit
SOURCE Old Mutual Asset Management
Contact: IAA: Laura Grossman, (202) 293-4222,
firstname.lastname@example.org; ACA: Lynne Carreiro, +44 (0)20 7042
0500, email@example.com; Old Mutual: Amy Yuter, (610) 578-1387,
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