Custody – Credit Card/ACH Payments – Best Practices for Avoiding Custody

$175.00

This sample form is a best practices checklist for purposes of custody as it relates an investment adviser firm which accepts credit cards or ACH bank payments for investment adviser services.

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This sample form is a best practices checklist for purposes of custody as it relates an investment adviser firm which accepts credit cards or ACH bank payments for investment adviser services.

Many securities regulators view the payment of investment advisory fees via credit card or ACH withdrawal from a bank account as custody depending upon the facts and circumstances associated with such transaction. Please understand that at the time that this checklist was created there has been minimal public guidance from securities regulator on how an investment adviser can accept credit card or ACH payments without such arrangement being classified as an investment adviser firm having custody of client funds.   The following best practices are designed to limit an investment adviser’s ability or authority to make unauthorized credit card or ACH transactions.   Please understand that RIA Compliance Consultants, Inc. (“RCC”) is not offering any opinion, warranty, guarantee or safe harbor with respect to whether a securities regulator will consider the best practices described in this checklist as adequate for avoiding custody when accepting credit card or ACH payments.  RCC recommends that an investment adviser firm contact its securities regulator regarding whether implementing such practices would avoid the investment adviser firm being treated as having custody of client funds.

Please understand that annual financial planning services or subscription plans with recurring charges may face scrutiny from a securities regulator with respect to whether the investment advisory fee is reasonable.  For example, many securities regulators may find a retainer fee for mere availability (where no services were actually provided) as unreasonable.  This checklist is not intended to address such issues of whether an investment advisory fee is reasonable.

This sample form should be considered as a starting point; the investment adviser firm will need to customize this sample form to its business model and policies and procedures.  Please see our disclosure about the limitations of sample form at http://www.ria-compliance-consultants.com/ria_express_investment_advisor_compliance_tools/sample-forms/

This sample document  is delivered via the purchaser’s online subscription account with RIA Compliance Consultants.  If the purchaser does not have an online subscription account, after the purchase, the purchaser will receive a follow-up email directing the purchaser to establish online subscription account. This step will need to completed before our systems can deliver the sample document.  For an instructional video, please visit http://ria-compliance-consultants.com/subscription-account-demo/

Included with Bronze, Silver, Gold and Platinum Packages.  Initially posted in December 2018.