Some recent SEC Actions

Periodically the SEC publishes actions they take against RIA’s. The SEC publishes months even years after they initiate investigations. What do you think happens to the relationship between the RIA and the custodian/broker dealers they use?

Recently 2 pretty hefty AUM RIA’s were disciplined by the SEC, Frontier Wealth Management and FCG. The compliance violations were significant. These RIA’s used Schwab and Fidelity as custodians. Frontier is a Billion Dollar AUM RIA and FCG merged with Cambridge as the the SEC action was about to be published. I contacted both RIA firms to ask if Schwab or Fidelity terminated their contracts thereby booting them from their platforms. Neither responded.

Schwab claims the size of an RIA does not influence their decision to terminate a relationship. But it does - Schwab only terminates contracts with small AUM RIA’s. For small AUM RIA’s Schwab terminates and notifies all account holders of the RIA.

If you are an account holder at either of these RIA’s - were you notified by Schwab? Were you notified by the RIA of a change in custodian? Or are you unaware?

Visit my website: https://www.smalladvisorsunite.com

Read about how it really works when this happens.