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SEC Examiners Warn Advisors of ESG Missteps

April 13, 2021

Investment advisors and firms that use ESG strategies should make sure their investment process is disclosed and consistent. Their marketing materials should reflect what they actually offer, according to a new SEC risk alert.

Foreside’s Douglas Kamin, Managing Director, spoke with WealthManagement.com regarding last week’s risk alert and shared that the boost in ESG popularity makes marketing and disclosures a particularly important focus from the compliance standpoint.

“If firms claim they’re using an ESG approach or touting ESG products, they need to ensure that any client-facing documents or marketing are truly an accurate measure of their practice, including any third-party products.” Douglas Kamin, Foreside

Regardless of a firm’s investment approach, the compliance issues outlined in the risk alert could apply to any strategy, although the SEC was specifically citing ESG in Friday’s risk alert. Click here to read more from WealthManagement.com.