Beacon Capital Management
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fundamentally improving the science of investing

February began on a high note as investors drew encouragement from strong fourth-quarter earnings reports and encouraging employment data. However, news was not all positive. The COVID-related death toll in the United States reached 500,000. Nevertheless, two vaccines were rolled out last month, with a third one on tap for release in March.

While rhetoric surrounding additional fiscal stimulus continued throughout the month, February saw no congressional deal reached. However, the Federal Reserve continued to offer assurances that continued accommodative measures would remain in place for the foreseeable future.

did you know?

If your fiscal year ended on 12/31, you need to file all your Form ADVs, including the new Form CRS, no later than 3/31. Form CRS is designed to make it easier for your retail investors to summarize their relationship and includes information about fees, legal standard of conduct, services, disciplinary history and conflicts of interest.

There are a number of factors that regulators will be taking a closer look at this year as detailed in the SEC 2021 exam priorities, including:

  • Supervision of your personnel — particularly if they have been working from home
  • Investment fraud
  • Protection of the investor and their sensitive information
  • Business continuity
  • Practices that are applicable to expenses, fees and other financial transactions
  • Compliance with regulatory standards
  • Evidence of cyber security measures
  • Protecting the investors’ assets
  • Thorough documentation
  • Regular communication with investors
  • Transparency in your practices
  • Compliance was maintained despite the pandemic

Sources: RIAinabox 

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Compliant Advising:
Understanding the DOL best interest standard

After many years of development and discussion, the United States Department of Labor (DOL) rule, originally set to be enforce in 2018, has now gone into effect, though with different rules and regulations compared to its predicator. The now enforce DOL Rule is mainly designed to establish best interest standards to protect investors. This exemption went into effect on February 16, 2021. So, what does this mean for your business?

The exemption targets the advice given by registered investment adviser (RIA) firms regarding their clients’ qualified retirement plan (“QRP”) accounts. In order to be compliant with this new regulation, most RIA firms that are registered with the Securities and Exchange Commission (SEC) or the states, need to take action immediately.

Only advisors that provide their clients with purely educational information regarding moving their assets from their existing QRP to another investment account, can avoid compliance with the new DOL regulations.  Although Beacon Capital Management itself does not provide our clients with recommendations regarding model changes, portfolios, transferring an IRA to a qualified retirement plan (QRP) and similar advice, you as an advisor often do.

For example, an advisor recommending that a client rollover over their assets from a QRP to an IRA would now be subject to the DOL’s Impartial Conduct Standards as well as other policies, procedures, disclosures and documentation requirements under the new DOL Rule. These standards are comprised of three parts:

  1. a best interest standard
  2. a reasonable compensation standard
  3. a requirement to refrain from making statements about investment transactions and similar matters that are misleading

Going forward, it is imperative that RIA firms ensure that they meet these requirements every time an interaction involves an IRA rollover recommendation. Implementing these changes now makes full compliance seamless — even after the probationary period has elapsed.

A temporary enforcement policy is slated to remain applicable until December 20, 2021. Essentially, this provides RIA firms with the ability to possibly still provide fiduciary investment advice concerning IRA rollovers as long as they are doing so in good faith and diligently complying with the transaction’s impartial conduct standards.

While we anticipate additional guidance to continue to develop, here are a few best practices to keep in mind:

  • ensure Impartial Conduct Standards compliance as detailed above
  • backup all rollover recommendations with thorough documentation, including any conflicts of interest
  • implement written procedures and policies that support compliance with the Impartial Conduct Standards
  • maintain thorough reports and records for a minimum of six years
  • review the compliance program on an annual basis to ensure that any changes are noted

Beacon Capital Management, and the financial advisors who partner with us, take pride in offering our clients fiduciary advice that is tailored to meet their goals, circumstances and comfort level. In many instances, you are likely already complying with these standards, but now it is more important than ever to document each step diligently. As always, if you need further guidance or have any additional questions, we encourage you to reach out to us at Beacon HQ.

Source: RIAinabox, DOL

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Thank you again for your continued support of our announcement about becoming part of Sammons Financial Group. Please note, during this transition period, there is a letter and consent form that needs to be completed by all new accounts between now and April 1.

Download Updated New Account Package

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