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The Markets Quarterly Review

Following a tumultuous close to 2018, stocks enjoyed a robust January. Positive feedback from ongoing negotiations between the United States and China, coupled with strong job growth, low inflation, and stable interest rates, helped fuel investor confidence that pushed the major benchmark indexes to levels not seen in 30 years — despite a partial government work stoppage. Each of the indexes listed here posted notable gains, led by the small-cap Russell 2000, followed by the Nasdaq, S&P 500, Global Dow, and the Dow.

Stocks continued to climb in February, albeit not at the breakneck pace of the previous month. Corporate earnings reports were generally positive, and trade talks between the United States and China continued with no deal being reached, but signs of a favorable resolution in sight. The partial government shutdown ended at the end of January. The Federal Open Market Committee indicated that it was inclined to refrain from increasing the federal funds target interest rate range for the foreseeable future. Investors continued to push stocks higher. The Russell 2000 again led the way for February, increasing its value by over 16% over the first two months of 2019. Of the indexes listed here, only the Global Dow failed to gain at least 3.0% (or very close to it) by the end of February.

did you know?

After many delays and false starts, the SEC is expected to release is proposed Regulation Best Interest Rule in the third quarter. Early comments on Reg BI describe it as “pretty broker friendly,” but it could have some sticking points. In speaking with various media outlets, Neil Simon, vice president of government relations at the Investment Adviser Association, said:

  • The rule is ambiguous, saying that a broker has to comply with the regulation when offering investment advice, but not otherwise
  • There is a lack of clarity regarding dual registrants
  • The decision by some state’s to introduce their own fiduciary rules “will make compliance very, very complicated”

Sources: Think Advisor, Financial Advisor, Investment News

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On the Regulatory Radar
News and Updates Every Advisor Needs to Know

On April 16, the SEC issued a risk alert pertaining to Regulation S-P Privacy Notices. According to the SEC Office of Compliance Inspections and Examinations (OCIE), the risk alert “is intended to assist advisers and broker-dealers in providing compliant privacy and opt-out notices, and in adopting and implementing effective policies and procedures for safeguarding customer records and information, under Regulation S-P.”

The SEC describes Regulation S-P as “the primary SEC rule regarding privacy notices and safeguard policies of investment advisors and broker-dealers.”

Regulation S-P Requirements

As part of its governance, Regulation S-P includes three key requirements:

  1. Provide a clear and conspicuous notice to its customers that accurately reflects its privacy policies generally no later than when it establishes a customer relationship.
  2. Provide a clear and conspicuous notice to its customers that accurately reflects its privacy policies and practices not less than annually during the continuation of the customer relationship.
  3. Deliver a clear and conspicuous notice to its customers that accurately explains the right to opt out of some disclosures of non-public personal information.

At Beacon, we believe merely having policies and procedures in place isn’t enough with Regulation S-P to be effective, advisors must also consistently review their written policies and procedures to ensure compliance.

Other Regulatory Updates and Reminders

Although the 35-day government shutdown slowed the SEC’s directives at the beginning of the year, things are beginning to heat up at the government agency. The following are a couple of regulatory updates and one reminder for advisors to keep in mind in 2019:

The Best Interest Rule. Recent reports point to the SEC finally releasing its final advice-standards package in the third quarter. Included in that package will be Regulation Best Interest. While we don’t have the full rule in hand yet, based upon the information we’ve been hearing, we expect this to be a very tame version of the Fiduciary Rule. And, because Beacon and its advisors have always held that fiduciary responsibility with clients, this ruling should not cause changes in how we do business.

Advertising and Performance Guidelines. In an interesting bit of news, the SEC plans to come out with updated advertising and performance guidelines later this year. Why is this interesting? Because these guidelines have not been rewritten since the 1960s, and it’s long overdue for an overhaul due to the technological and communication advancements that have taken place in the past 50 years.

ADV Compliance Checklist. Finally, a reminder. If your fiscal year ended December 31, make sure that you’ve provided your annual delivery documents to your clients. It’s easy to make mistakes or miss a detail when filing Form ADV because it has very specific disclosure requirements so you can reach out to your contact at Beacon if you have any questions.

A Strong Fiduciary Role

At Beacon, we take our fiduciary responsibilities and the fiduciary responsibilities of our advisors very seriously. So that those duties are met, we’ve developed checklists, policies and procedures to work with our advisors to ensure that their clients have protections in place. If you would like to learn more about the tools and strategies we’ve designed, contact your wholesaler today!

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Volatility is here to stay. In fact—it’s increasing! This month we shared an exclusive webinar presentation, “Volatility: How to prevent its devastating effects.”

For your convenience, please find downloads of the presentation and supporting materials to discover how you can help prepare your clients and portfolios for today’s volatile markets.


For Advisor Use Only, Not to Be Used With Clients

The GIPS Compliant Presentations for our Vantage portfolios can be obtained by clicking on the below link.  If you would like the Compliant Presentations to be emailed directly via PDF file or if you would like to receive a copy of Beacon’s Composite Descriptions; please respond to this email or contact Beacon at 937-439-9093.

BCM 2017 Compliant Presentations

Beacon Capital Management, Inc. is a registered investment adviser with the Securities and Exchange Commission. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance.

Additional information about Beacon Capital Management is also available on the SEC’s website at under CRD number 120641. Beacon Capital Management only transacts business in states where it is properly registered, notice filed, or excluded or exempted from registration or notice filing requirements.

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Beacon Capital Management

7777 Washington Village Drive, Suite 280, Dayton, OH 45459

P: 866.439.9093 | F: 937.424.4825