Cybersecurity has been on everyone's radar this past year, and it certainly showed in the 2014 Investment Management Compliance Testing Survey.
While last year, only 14% of respondents in the survey identified cybersecurity as a hot topic, that figure jumped to 75% this year. The survey was sponsored by the Investment Adviser Association, ACA Compliance Group and Old Mutual Asset Management.
“There have been so many high-profile cybersecurity breaches in the news, not just in the financial services sector, but more broadly, such as with Target,” Laura Grossman, assistant general counsel of IAA said.
And the SEC brought it to advisers' attention earlier this year, when it posted a risk alert and provided a checklist of what it expects firms to provide for cybersecurity protection.
“I think investment advisers are taking a serious look at what policies and procedures they should be developing,” Ms. Grossman said.
Along with cybersecurity, in the last year compliance testing has increased most in advertising, disaster recovery planning, best execution and personal trading/code of ethics.
This matches well with where most “material issues” were found during compliance testing. Of the one-quarter of firms that found material issues, the most common were personal trading, advertising, custody, books and records, cybersecurity and disaster recovery planning, according to the survey.
Other compliance hot topics reported in the survey include social media, valuation, and allocation of fees and expenses, while regulatory reporting and insider trading have declined in interest since 2013.
Amy Yuter, vice president and senior compliance manager of Old Mutual Asset Management, said the survey is designed and updated to what's happening in the industry now.
“Just by taking the survey it gives respondents the ability to pick up practical ideas to enhance their compliance programs,” Ms. Yuter said.
The
survey, in its ninth year, was conducted online from April 24 to May 23 with more than 350 compliance professionals.
