Many financial advisors and their firms fail to understand and comply with custodial responsibilities to clients, according to the SEC . As a result, the commission has issued a “risk alert” and “advisor bulletin” to remind and educate planners about the importance of complying with custody rule.

“We take deficiencies in this area very seriously and want to put advisors on alert about the importance of complying with the custody rule,” Carlo V. di Florio, director of the SEC’s Office of Compliance and Inspections, said in a statement.  “It is a key component of our investment adviser examination program.” 

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