October 12, 2020

Jim Lundy Speaks with CNBC about Form CRS and Its Requirements for RIAs

In the article “Your advisor might be able to sidestep this federal disclosure rule. That may not be a bad thing, some say,” CNBC reports that while many of the nation’s broker-dealers and registered investment advisors — known as RIAs — are required to provide clients with a disclosure document called Form CRS, there are also many RIAs who don’t have to. The news outlet turned to partner Jim Lundy for guidance on Form CRS and how it impacts RIAs.

The article highlights that, even if an RIA has a state registration, there is certain oversight by the SEC.

“State-registered RIAs are still subject to antifraud provisions of federal securities laws,” Lundy said.

That means those smaller RIAs still must adhere to the fiduciary duty imposed by antifraud provisions in federal law, CNBC added.

“They may not have the same prescriptive requirements as Form CRS, but they have similar disclosure requirements pursuant to their fiduciary duty,” Lundy noted.

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