This month we continue our look at some of the behind-the-scenes work that gets done around P&A by taking a closer look at our Compliance efforts.
Although it is probably a favorite topic of very few people, Compliance is a critical part of the operations at P&A and something we take very seriously. Our compliance efforts are led by Kristin Kliewer, our Chief Compliance Officer.
The financial services industry might rival the medical industry in terms of Compliance requirements and complexities. The effort to protect investors is a continuous, evolving process and this requires constant attention to the SEC’s rulemaking activities and agenda.
Due to our business practices and assets under management threshold, P&A is required to register directly with the U.S. Securities and Exchange Commission1. As part of our registration, with the SEC, we P&A must file a handful of documents to make sure our clients and potential clients are well-informed on our business. Our main annual filing is Form ADV – a three-party form meant to identify a firm’s business model, client type and conflicts of interest.
- Form ADV Part 1–a fill-in-the-blank registration form that provides the SEC with the basic facts of our firm. This includes basic information, such as ownership, number of employees, types of clients, and asset under management calculations.
- Form ADV Part 2- acts as our firm brochure. This document is meant to provide required disclosure and business transparency in a specific format free of industry jargon. Once a firm files their annual amendment, their most recent Part 2A will become available publicly.
- Form ADV Part 3- due to the complexity and length of the ADV Part 2 document, the SEC decided to implement an additional 3rd item in 2019. Part 3, also known as Form CRS (Client Relationship Summary) is a two-page, condensed document intended to provide an investor an easier way to compare different firms and business models that exist in the financial industry. The form also provides specific conversation starters, which allows the firm an opportunity to answer specific questions.
At P&A, transparency is one of our core values and we are constantly looking for ways to educate our clients and build trust. We try to be diligent, thorough, and intentional with our compliance requirements and want our disclosures and documents to be readily available. You can find the latest update to our ADV on our website: https://pittand.com/adv-and-privacy/.
In addition to reporting requirements, our Compliance team and procedures also include some of the following key items:
- Supervision of P&A team members: P&A takes great pride in our open-office layout. Not only does this provide for constant opportunity to learn and grow as a team, but also intentionally exposes constant advisor/client interactions to challenge our ethics and firm values. We want all teammates to be rowing in the same direction and we believe our open office allows for the best opportunity to do so.
- Completing best execution for our clients: As a fiduciary, we review and evaluate trading practices to ensure best execution requirements are being fulfilled. Factors include swiftness of execution, price at which the trade is done, whether there is commission charges, and ability to not move the market in an undue fashion for large executions.
- Continual cybersecurity improvements: When it comes to cybersecurity, we understand the paramount role we play in keeping our client information safe and we do not take this responsibility lightly. We have routine training exercises to keep us on our toes and educate our staff on the newest threats and industry weaknesses. We implement dual factor authentication as an additional technology security measure when available and recommend our client implement this feature on other outside technology resources when available. We are constantly monitoring our client activity and on the lookout for any red flags or concerning activity.
All of these efforts are meant to help us continue to deliver a high-level of service to our clients. We hope you’ve enjoyed pulling back the curtain to get a closer peek inside of our compliance program.
- Being registered with the SEC does not constitute an endorsement of the firm by the Commission, nor does it indicate a firm has attained a particular level of skill or ability.
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Pittenger & Anderson, Inc. does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Additionally, the information presented here is not intended to be a recommendation to buy or sell any specific security. To learn more about our firm and investment approach, check out our Form ADV.
To view this article and others like it online, visit the P&A blog at https://pittand.com/blog/.
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