Deals & People June 23, 2023

Retirement Industry People Moves

DriveWealth appoints Pizzorusso as global CFO; Burke joins Cetera Advisors; Hub International Mountain Welcomes Executive VP; and more.  

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DriveWealth Appoints Pizzorusso as Global CFO 

DriveWealth LLC announced the appointment of Jason Pizzorusso as global chief financial officer.  

In his new role, Pizzorusso will lead strategy and development of the company’s global growth. Prior to joining DriveWealth, he spent 16 years at Morgan Stanley, most recently as CFO of the wealth management segment.  

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“Jason is an exceptional leader with a proven track record of success in our industry,” Bob Cortright, DriveWealth’s CEO, said in a statement. “His expertise and extensive knowledge across both finance and technology will be instrumental in driving our growth and global expansion.”  

Burke Joins Cetera Advisors 

Cetera Financial Group announced that senior financial adviser Janet Burke has affiliated with Cetera Advisors by joining Sunrise Wealth Advisors.  

Burke oversees approximately $50 million in assets under administration, as of May 31. These assets will now be housed with Cetera Advisors. She was previously affiliated with Ameriprise Financial Services LLC. 

“As a woman in the wealth management field, I’m thrilled to join Cetera, where I feel my unique experiences and voice are both heard and understood,” Burke said in a statement. “I’m also excited by the prospect of offering a boutique-style investment experience to my clients, which is a trademark of Sunrise Wealth Advisors.” 

Hub International Mountain Welcomes Jones as Executive VP 

Scott Jones 

Hub International Mountain States announced Scott Jones as executive vice president of employee benefits sales.  

Jones has held leadership positions in employee benefits sales groups as a high-level executive at Hub International since 2015.  

In addition to his professional achievements, Jones, based in Boise, Idaho, is involved in multiple small businesses within his family. Hyde Perk Coffee, 44 East Boutique (Meridian) and All-In Wrestling are just a few examples of his ventures. 

Sequoia Promotes McCauley, Tichnell, Hires Glick as COO 

Sequoia Financial Advisors LLC announced that Annie McCauley has assumed the role of executive vice president and chief client experience officer, while Kevin Tichnell is now chief strategy and acquisitions officer. In addition to the two promotions, Joseph Glick has joined the firm as executive vice president and chief operating officer. 

“Our priorities are organic growth, selective acquisitions, and operational excellence,” Tom Haught, founder and CEO of Sequoia, said in a statement. “Annie is now responsible for organic growth and unifying our client experience, asset management and planning. We welcome Joe to Sequoia in the key role of overseeing our growing operations and breadth of services. Kevin will focus solely on leading our M&A efforts.” 

Stone Ridge Appoints Mathas as Senior Adviser 

Stone Ridge Holdings Group announced that Ted Mathas has joined as a senior adviser. Mathas had served as New York Life chairman and CEO for more than 14 years.  

Mathas, who retired from New York Life in April 2022, will help Stone Ridge scale its innovative suite of products purpose-built for financial advisors and insurance companies. Additionally, he will provide mentorship and guidance to its executives and operating subsidiaries. 

“I am fortunate to be in a position where I can retire from a full-time role and company I love, but not stop working on things I care deeply about with people who share my values and passion,” said Mathas. “I’m especially excited to help develop and distribute Stone Ridge’s breakthrough innovation of embedding longevity pooling inside asset management strategies.” 

Compliance June 23, 2023

IAA: SEC’s Pending Adviser Proposals Are Redundant, Inconsistent

A letter from the industry association outlines what it calls overlap and inconsistencies between them.

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The Investment Adviser Association is arguing that the Securities and Exchange Commission’s four pending adviser proposals are “duplicative,” “inconsistent” and “address overlapping concerns.”

The IAA’s letter addresses four pending adviser-related proposals introduced by the SEC, including Reg S-P, which seeks to protect customer information and data; a rule addressing cybersecurity safety; a proposal for registered advisers to monitor and be responsible for the work of outsourced vendor services; and an asset safeguarding rule that seeks to increase scrutiny of how asset managers handle and maintain client assets.

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The IAA took aim at redundancy in some of the proposals in a comment letter sent to the regulator on Saturday with a call for consolidation and clarity before enforcement begins.

The DC-based advocacy group noted that both Reg S-P and the cybersecurity proposal require advisers to maintain policies to detect and respond to digital breaches and attacks, with Reg S-P requiring an adviser to inform affected customers within 30 days of a breach and the cybersecurity proposal requiring advisers to inform the SEC within 48 hours of a significant cyber event.

The IAA also pushed back on requirements in the safeguarding and outsourcing proposals that advisers obtain reasonable assurances in contracts with various service providers.

Gail Bernstein, the general counsel at IAA, argues that the contractual obligations in these proposals will require advisers to go to different partners and third parties and obtain assurances from each. Bernstein says that “when you have to go back to the same people for different requirements, it’s problematic.”

The IAA also asks that the SEC clarify that the outsourcing rule does not apply to asset custodians, who would already be covered under the safeguarding rule.

For example, the outsourcing rule would require advisers to negotiate contracts in which they are assured by custodians that they will coordinate on compliance issues. Meanwhile, the safeguarding rule would require advisers to secure contractual assurances that their clients’ assets will be segregated from the assets of the custodian.

Bernstein says “this bucket of rulemaking is going to be extremely disruptive.”

Both Bernstein and the IAA’s letter emphasize the importance of reducing the regulatory burden on small advisers. The general counsel argues that small advisers should be excluded from the 48-hour reporting requirement in the cybersecurity proposal because the purpose of the disclosure is to make the SEC aware of a market-wide issue, but a compromised small adviser is unlikely to be involved in a widespread problem. In a case where many small advisers are compromised all at once, the SEC will hear about it from their system service providers and larger advisers who were also affected.

Lastly, Bernstein says the SEC should “come up with a more balanced approach” to accommodate smaller advisers. Specifically, it should have a tiered approach that extends compliance dates and reduces requirements for smaller firms.

 

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