“Every time we generate a Form CRS in our system on behalf of an advisor client and deliver that, we keep records for them and track the production and delivery of that form to the client so that they can demonstrate compliance,” said Cirrotti. “In large firms, all of the tracking is exposed to the home office for supervision and compliance purposes in the form of reporting. The home office has all kinds of reports available to them, they can look up and ask to see all of their firm’s retail accounts and search for any account without a Form CRS generation date associated with it, and then go back and ensure that any gap that occurs is [bridged]. They’ll be able to go back and ensure that every retail investor receives a form CRS.”

Most advisors appear to be adjusting well to the new regulations, said Cirrotti, even with the deadline for compliance just over a month away. Most were preparing for new fiduciary regulations years ago when it appeared the Department of Labor’s fiduciary rulemaking would become the law of the land, while others who waited to make significant changes during the DOL’s process are more likely to struggle to come into compliance with Reg BI.

Though the pandemic hasn’t yet pushed back the SEC’s regulatory deadline, it has in some ways helped advisors become more prepared, said Cirrotti.

“There’s now a shared experience between firms and advisors, and advisors and the end investors,” he said. “They’re seeing the value in increasing our use of electronic delivery and the overall digitalization of the business. Investors are seeking ways to get information quickly without having to handle paperwork or the mail, and advisors are now realizing that perhaps in the past they didn’t do the best job that they could in collecting and tracking information. That’s all driving a change in how we’re delivering materials to each other. We think it’s an opportunity for the industry to step forward.”

Pershing is offering both digital Reg BI solutions as add-ons to its advisory platform using a tiered fee schedule depending on the size of the client and the number of accounts, consisting of an implementation fee, an annual fee for the maintenance of client records on the platform, and a per-piece fee for any non-digital delivery to cover print, paper and postage costs.

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