Conflicts of interest at firms have historically been an area of concern for the SEC. More recently, the regulator has made the industry aware that those concerns continue today to an even greater extent, and it wants firms to devote more time to addressing conflicts. According to Amy Lynch, FrontLine’s Founder and President, the SEC now has a much stricter stance on conflicts, requiring firms to eliminate or mitigate them in addition to disclosing them. She comments that the SEC’s increased attention on conflicts of interest likely stems from the amount of consolidation in the industry since the financial crisis. Ms. Lynch explains that the many mergers and acquisitions, joint ventures and new affiliations have resulted in numerous new relationships and multiple revenue streams, the primary way conflicts are created. She also notes that new products and services may be another factor creating more conflicts, based on the sheer number and complexity of offerings today. See Financial Advisor IQ, “SEC to Advisory Shops: Resolve FAs’ Conflicts of Interest, Quick“
Founder and President Amy Lynch exclusively quoted in another related story. See Financial Advisor IQ, “Advisor Sued for Cherry-Picking Leveraged ETF Trades“
