July 18, 2018
OCIE Releases List of Most Common Best Execution Issues Cited in Adivser Exams
On July 11th, 2018, the Office of Compliance Inspections and Examinations (OCIE) released a risk alert outlining the most common deficiencies cited in adviser examinations regarding best execution obligations. The risk alert summarizes issues identified in deficiency letters from over 1,500 adviser examinations.
The most frequent best execution issues include:
WHAT DOES THIS MEAN FOR ME?
Under the Investment Advisers Act of 1940 (“The Advisers Act”), registered investment advisers have a fiduciary duty to maintain “best execution” of client transactions. Best execution can be obtained by considering the circumstances of a transaction in such a manner that the client’s interests are the most auspicious. In directing brokerage, advisers should consider their quality of services, including the value of research and their execution capability.
Fairview is committed to answering any questions or concerns regarding the conclusions of OCIE Risk Alert and will be working with clients to ensure best execution practices are compliant and in accordance with their fiduciary duty. In addition, Fairview assists clients in preparing meeting materials and documenting best execution review in a manner consistent with best practices.