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Stocks posted gains in July in spite of gloomy news on the economic and pandemic fronts. Investors continued to trust equities despite the gross domestic product falling nearly 33.0% in the second quarter, mixed quarterly corporate earnings results, emerging pandemic hot spots, growing unemployment claims, and ongoing turmoil between the United States and China.

On the positive side, 4.8 million new jobs were added in June, the housing sector surged, and industrial production continued to rebound. Investors also may be hoping that more financial stimulus is in the offing. Energy stocks, which had plunged in May, rebounded in June and continued to keep pace in July.

The COVID-19 pandemic continues to dominate nearly every aspect of life. Some states are seeing the number of reported cases soar and have considered (and, in a few cases, enacted) partial lockdowns. Throughout July, several companies made announcements of progress toward either treatment or a vaccine. States and local communities struggle with plans to get students back to school.

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The pandemic has brought to light planning gaps for many advisors, perhaps none so much as technology. Spending on technology is set to increase at a compound annual growth rate of 5%, with wealth managers expected to spend $24 billion in annual technology upgrades by the year 2023. Trends in new advances and priorities include:

  • Digital onboarding
  • Biometric authentication
  • Virtual assistant chatbots
  • Robotic process automation

Source: InvestmentNews

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Compliance in a Covid World

COVID-19 has ushered in a new way of doing business, and the SEC has developed guidelines to address key risk issues. The pandemic has changed the financial advisory landscape, but it does not alleviate our responsibilities to our clients. The SEC has made it clear that the coronavirus will not be a cover for misconduct. The latest risk alert from the agency on August 12 speaks to 6 important issues that have emerged in these unprecedented times.

Protection of investors’ assets
Updating supervisory and compliance policies are important in protecting investors’ assets from theft, loss, and misappropriation. Unusual withdrawals from accounts should undergo extra scrutinized, especially COVID-19-related distributions from a retirement account. Clients should also be made aware of changes when making deposits to their accounts. Ideally, checks should be sent directly to the custodian, but make sure to inform clients that their checks may take longer to process.

Supervision of personnel
Firms are obligated to supervise personnel activities, including personal trading. While supervising employees from a distance is difficult, it is important to implement safeguards such as only using firm-approved and secure communications channels and devices.

Practices relating to fees, expenses, and financial transactions
Transparency in fees and expenses has always been a focus for examiners, but even more so because of increased financial pressures firms are facing in volatile markets. Violators will be penalized for egregious errors in billing, borrowing money from a client, and making recommendations that will generate higher fees but are not in the best interest of the client.

Investment fraud
The OCIE examiners have observed that uncertain times can create a heightened risk for investment fraud. Be mindful of these risks as you perform your due diligence in making recommendations in the best interest of your clients. Remember, if you suspect fraud, contact the SEC to report it.

Business continuity
Because many firms are working from home, business continuity plans are no longer hypothetical and have been put into practice. Succession plans for key personnel need to be in place to ensure business disruptions are kept to a minimum. Protracted remote operations will require evolving policies and procedures.

Protection of investor and other sensitive information
Protecting a client’s personally identifiable information (PII) is a top priority. With the increased use of videoconferencing and web-based applications and increased use of personal devices, there has been an uptick in phishing and other forms of fraud. Cybersecurity vulnerabilities need to be addressed, and policies amended in this fast-changing environment.

Pandemic workplace conditions will not be a defense for compliance failures. The SEC has recently created the Event and Emerging Risks Examination Team (EERT) designed to act quickly to help firms better prepare for emerging threats and market events that warrant quick expertise and resources.

As your team learns to adapt and navigate this new virtual reality, take action, and document any updates to your policies and procedures necessary to fulfill these demands. For additional ideas or recommendations in any of these areas, feel free to reach out to us at Beacon HQ to let us know how we can be of help.

Sources:,, Financial Advisor, ThinkAdvisor

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Beacon Capital Management was recently named to Financial Advisor’s 2020 RIA Ranking. Thank you to all our dedicated advisors and staff for your belief in our investment philosophy and making our continued growth possible.

Be sure to visit Beacon’s News & Press page for the latest credibility pieces to share with your clients and prospects, and follow Beacon on LinkedIn for the latest updates as they happen.


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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 link below.  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 2018 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